Debates of Dec. 14th, 2010

Statements by the minister and the parliamentary secretary regarding KAIROS

[Bob Rae, Liberal, Toronto Centre, ON]

She has had several days. She has been here. There is no new information.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

The member opposite, Mr. Speaker, does not appear to be interested in the truth. He only appears to be interested in making some cheap political points by his heckles. That is quite apparent.

I would ask quite sincerely, Mr. Speaker, that you reserve your decision until the minister can make her response to this very serious allegation and we will be doing so in due course.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I want to note that yesterday the parliamentary secretary did acknowledge his comments in the House, and I appreciate that from him.

However, I think it is important for you to check the record as to what he said, because not only did he take responsibility for the words that he had said to the House, and that is to be lauded, but he also suggested that the comments that were made by him at the time he was representing the minister were also reflective of what he thought the government's position was, in other words, what his minister's position was. That was that they had taken into consideration what the department was saying and, therefore, came up with this erroneous position that in fact it was the department that had said no to the application. I think it is important to note that.

Again, I give credit to the parliamentary secretary at the time for acknowledging and taking responsibility for words that he stated in the House.

We are asking that the minister do the same.

At committee, I asked her to clarify her comments and essentially to straighten the record. She was not able to do that.

Finally, it is important to acknowledge as well other evidence that was brought forward which I was not aware of at the time when I was questioning the minister in front of committee. That is the information that you will now have from the order paper question that was submitted by one of my colleagues and I believe an access to information where it does say clearly that the minister's response was based on, and that is the application that was turned down for KAIROS' funding, the information given to her from the department.

You know the contradiction, Mr. Speaker. The record is clear.

You have this piece of evidence. You have the evidence of the member who was formerly the parliamentary secretary who suggests that the department's advice is what was taken into account for the decision. I believe that is very important. It is cogent. I believe you will find there is a need to look into this further.

I do not believe that the minister was clear at all, in fact was not able, when given an opportunity at committee, to straighten the record, and in fact made things a little more obtuse. That is why it is important that we look at this, to have some clean hands take a look at this. I think you will find there is enough here for it to be sent to committee to look at for privilege and contempt.

[The Speaker, Liberal, Peter Milliken]

I am not going to hear more on this today. I think that is enough. We are going to be hearing more, as indicated by the parliamentary secretary, from the minister in due course and I think it is reasonable to wait for the minister to come back to the House.

We had an indication there would be submissions, yesterday, from the Bloc and that is why I heard the Bloc initially. We will hear more in due course. Now we are carrying on.

The House resumed consideration of the motion that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the third time and passed.

Standing up for Victims of White Collar Crime Act

[The Speaker, Liberal, Peter Milliken]

When the matter was last before the House, the hon. member for Bonavista—Gander—Grand Falls—Windsor had the floor, and there are seven minutes remaining in the time allotted for his remarks.

I therefore call upon the hon. member for Bonavista—Gander—Grand Falls—Windsor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I want to pick up where I left off and in the meantime one thing I wanted to bring to this debate, which I did not have a chance to do, is to note that even today we had the crown prosecution in Newfoundland and Labrador recommending a businessman involved in a 2006 spending scandal in Newfoundland and Labrador's legislature be given a three-year prison sentence and be ordered to repay $450,000.

That was coming from the situation we had in the province where some elected members of the day as well as some administrative members had defrauded the House of Assembly of Newfoundland and Labrador, which in turn defrauded the population of the province of several sums of money well in excess of $1 million. People were charged and brought to court for that and sentenced. Many of the sentences have been served, but nonetheless today we see one of the people involved in that case and the extent to which this can go to.

Picking up on Bill C-21 once more, I want to go through some of the notes that I discussed earlier talking about minimum sentences applying solely to a person convicted of the general offence of fraud, subsection 380(1). It does not seem to apply to other related offences and that is what I want to pick up on, that it is one of the reasons why we need to make this a much stronger piece of legislation. These are some of the loopholes that we brought up earlier as well, and I would like to touch on some of this such as fraudulent manipulation of stock markets, insider trading, fraud affecting publication.

In these three cases, however, where the value of the subject matter exceeds $1 million, that would remain an aggravating circumstance and therein lies the strengthening that needs to come back to this piece of legislation. Nonetheless, when we talk about criminal offences to institutions, that was also brought up by one of my colleagues. The institutions exempt are the larger offenders. In this situation it becomes a milder offence for the few that are charged even though they do receive extensive charges.

Clause 3 of the bill adds four aggravating circumstances to the list. That would be the magnitude, complexity, duration or degree of planning of the fraud committed was significant. In the form of sentencing this is a very key aggravating factor. The offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation.

The third aggravating factor: The offender did not comply with a licensing requirement or professional standard that is normally applicable to the activity or conduct that forms the subject matter of the offence. Finally, the fourth one contained within clause 3 is: The offender concealed or destroyed records relating to the fraud or to the disbursement of the proceeds of the fraud, which are prominent in many of the recent cases, which I will not go into because there are far too many to mention.

In addition to these specific aggravating circumstances, the general aggravating circumstances contemplated in paragraph 718.2 of the code will continue to apply. That includes the abuse of a position of trust or evidence that the offence was committed in association with a criminal organization. Moreover, the court shall cause to be stated in the record the aggravating and mitigating circumstances they took into account when determining the sentence. That is contained in 2.2 and that is the aggravating circumstances one must consider when talking about sentencing, which I agree with in this case.

With respect to restitution order 2.4, under the existing provisions a judge passing sentence for any offence under the code may order the offender to make restitution to the victim for damage to property or for bodily or psychological harm. That is very important. The court must give priority to restitution before imposing a fine on the offender. A restitution order is discretionary however, meaning that the judge may decide not even to grant it.

The bill states, “the court shall inquire of the prosecutor if reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses”.

That is a new subsection within this legislation. In addition, “If the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record”.

In the few minutes I have left, I would like to talk about one of the issues that came up in this particular legislation, and in other pieces of legislation, which is the victim impact statements. I have always ascribed this to be a very important element when it comes to the sentencing of people convicted of crimes. In this particular bill, clause 4 talks about that.

The code currently provides for a victim impact statement to be filed at the sentencing stage. For the purpose of determining the sentence to be imposed for any offence under the code, the court is required to consider any victim impact statement describing the harm done to, or loss suffered by, the victim arising from the commission of the offence.

Each and every time these frauds take place, we see in the evening news, in all the newspapers, that the impact of this is absolutely immense. So much of this occurs. Thousands and thousands of cases are reported. I would say the vast majority in this House know people, family members, maybe their own parents and children, who were victims of fraud. It is excruciating to go through and it could last for quite some time for those people defrauded of their life savings, their nest eggs, hundreds of thousands of dollars. Of course, in this particular case, we focus on the $1 million mark.

For the purpose of the code, “victim” means a person to whom harm was done or who suffered physical or emotional loss as a result of the commission of the offence. To me, that seems to be a very valid and important part of this legislation.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I would like to focus on what my colleague was speaking about in the last remnants of his presentation. He was talking about the victims.

The victims are the individuals who unfortunately seem to get overlooked. I do not think we see this bill going far enough. I can only refer to my own riding of Sudbury. Most of these victims are seniors who have invested their life savings. They have worked 30, 40 and sometimes even 50 years and put their savings and trust into these individuals who create Ponzi schemes. Unfortunately, when they come to retire they find out that the individual has taken their money, disappeared and has gone somewhere lush and lucrative. They never get the opportunity to live the life they wanted to in their golden retirement years.

While we are supportive of this bill, we would like to see this legislation go a little further to protect individuals and victims of these crimes. I would like to hear the hon. member talk a little more about how he would like to see this legislation protect victims of white collar crime.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I will pick up on some of the comments that my colleague from Ontario brought up earlier on the cut-off of $1 million.

What makes $900,000 below the mark, not as important as $1 million? That is a significant amount of money. As I said earlier, I know of people, who I will not bring up here for reasons of privacy, but they were seniors defrauded of close to $100,000. It was absolutely devastating. The rest of the family now has to carry these people through the rest of their years. How embarrassing is that for someone who has been a victim of fraud? Those who are at the extreme low level of the pool of morality, if I could use that term, victimized these people.

Is it strong enough? No, it is not, and that is one of the issues, plus the fact that this needs to be publicized. We also need to put strong enforcement measures in place.

We talk about statistics all the time, but sometimes we have to put a face to this and look at ways to make changes, amendments, to further this legislation into the future. Down the road as the circumstances change, when it comes to the fraudulent behaviour of some people, the legislation has to be flexible and nimble enough to take care of this.

Talking about statistics, for example, 10,001 cases were found guilty in 2006-07. There were 88,286 incidents of fraud reported. That is a big number. Behind those numbers are families and individuals, absolutely devastated.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member knows that all parties in Parliament are supporting this bill. It is at third reading and has been through committee. It is essentially a good bill, particularly with the addition of the restitution orders and community impact statements.

The fact of the matter is that the problem is much broader than what this bill addresses. The previous government set up the IMET program through the RCMP back in 2003, and after five years there had been a mere five convictions on white collar fraud. Meanwhile, in the United States under similar circumstances there are 1,200 convictions under its laws.

Clearly, we have to go beyond what this little piece of legislation is going to do for us and not give the Conservatives the satisfaction of being able to campaign and say they solved the problem of white collar crime, because that is not being done with this piece of legislation. It is a good bill, but we need to do more than what this bill indicates.

I have a further question for the member if there is time.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I would love to promise him that I will not be so verbose as to not provide him time at the end, but I cannot since I make a living speaking, though I will see what I can do.

The two points he brought up earlier are very valid. Restitution orders and community impact statements are certainly profound measures within the bill that go a step in the right direction. For the very reason that we are all in the House trying to support this legislation, I have the same concerns he does, definitely.

I looked at some of the evidence that was put forward through the IMET back in 2005 and, for example, in 2008-09 17 individuals were charged with 979 counts. A total of five individuals have been convicted, as he pointed out, since the IMET program was established. It is a valid point that he brings up because, again, let me repeat the numbers, a total of five individuals have been convicted since the IMET program.

I mentioned some of the statistics earlier. More than 10,000 people were charged, more than 80,000 were reported, 88,286 incidents of fraud in 2007 alone. Yes, there is a discrepancy that we need to address, and I hope that in the future we will be able to do that. For these reasons of restitution orders and community impact statements, we need to pass this legislation immediately, but we need the broader discussion to take place.

That is why in the future, community impact statements will be very important, because we have seen the absolute devastation, which fraudulent behaviour creates, played out on the news each and every night, especially with seniors, as my hon. colleague from Sudbury pointed out. The average age in my riding is the mid 50s. Do the people committing the frauds know this? Darned right that they know this and they take advantage of it every day.

It is hard enough to educate people on the fraudulent behaviour that is out there, but there are people like Earl Jones and Madoff conducting these Ponzi schemes. They are cleverly crafted, incredibly well thought out and they can fool the smartest of people, as evidence has shown in Ponzi situations especially.

The devastation is no less severe because someone considers him or herself to be smart in all areas of finance. Therefore, it falls upon us to become the protecting agent, especially of those who are most vulnerable. If the most shrewd in our society and those who are incredibly smart in the financial ways of the world are getting fooled, what does that say about the average seniors who know very little about financial securities, other than the fact that they balance their chequebooks? That is the only financial responsibility that a lot of seniors have participated in for the past 30 or 40 years.

This is where this legislation needs to be more proactive, and I agree with the broader aspect of what my colleague is saying.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, Bill C-21, An Act to amend the Criminal Code (sentencing for fraud) is a bill we have seen before.

In fact it was with us in the last session of Parliament as Bill C-52. We went through some process on it, but as members are probably aware the House was prorogued. When prorogation occurs, all the bills die and have to start again unless the government chooses to reinstate them at the same position they were when prorogation took place.

As a consequence to that prorogation we have this bill. It is an interesting bill. It has an interesting short title, Standing up for Victims of White Collar Crime Act. If people heard that, they would have an image of what they think this bill might do, but in fact this particular bill does not deal with all white collar crimes. It deals with fraud over $1 million, and whether or not there is going to be a mandatory minimum sentence. It is somewhat misnamed. I will comment more on the short title later.

When the bill came back in the current session, it took another 60 days before the government brought it forward for second reading. Second reading occurred on October 4 and 5. I had a look at the debate. It was the same bill and pretty well the same speeches as were given in the last session.

It then went to committee and it was another 60 days before the committee got around to it. That is an indication of another problem, and it is that the justice committee is a very busy committee. There are an awful lot of justice bills, which arguably could have been combined with other bills and put in an omnibus bill. There are going to be the same witnesses if we are dealing with the Criminal Code or sentencing provisions. Chances are it is going to be the same interveners, the same witnesses and the same government officials.

The government has this thought that possibly if it takes every little change that it wants to make to the Criminal Code and gives it its very own bill, and the number of bills gets up high, people will say “My goodness, look at all the wonderful criminal justice bills we have here. Are we not tough on crime?”

I think someone actually did a little analysis and found out that 15 of the bills could have been handled in 3 bills alone. It gives the idea that there might be something to look at here, and maybe not to be too quick to judge a bill as to its scope or the ambit that it covers because it is a mirage.

The committee finished on November 30, and now a couple of weeks later we have third reading. Now we are going through this. The first thing that happens is that the government gets up and says that all the parties are supporting it, so why do we not just forget debating; we will just vote and pass the bill. It says we are delaying it and we should not be delaying the bill.

If we look back at the prorogation, the recalibration of the government, it was kind of an interesting excuse for doing things. If the truth be known, if the government wanted to say the truth, it was on its heels and in great difficulty, and the only way it could get out of it was to shut this place down, let things cool down and have some thinking time so we could come back and have a better start. I do not want to be too cynical about it, but the evidence sure does speak for itself.

The bill itself, as I indicated, has to do with sentencing for fraud. This is what this bill is about. It has a few elements, and they are included in the summary. It says that:

This enactment amends the Criminal Code to

(a) provide a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds one million dollars;

This is only relevant to fraud where the aggregate value exceeds $1 million. Obviously that is not all white collar crime. There are certainly some big name cases.

Part (b) of the summary says that the bill would:

provide additional aggravating factors for sentencing;

Although there is a proposed mandatory minimum, the sentencing for fraud at this level is usually significantly more than two years. But the number of years, which I think could go up to 14 years, is actually the longest term of sentencing currently, second only to life imprisonment. This already has penalties as high as one can get. That is a ceiling. We are talking about a floor in this bill.

The next part says it would:

(c) create a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others;

That makes some sense and there are some provisions here.

It also would:

(d) require consideration of restitution for victims of fraud; and

(e) clarify that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

In a number of cases, there are some very interesting people who are involved and they hurt a lot of people. The victims were in fact their friends and family.

When this bill went to committee, and this is a bill that the members of the justice committee are well familiar with, they reviewed it and the bill had to be reprinted as a consequence of their work. But the only change they made was to add the words “a victim seeks restitution and”. Those are the words that are added to this bill that was originally tabled at second reading.

To put that in context, this has to do with restitution. The full section, subsection 380.3(5), will read in total now, in this amended bill from the committee:

If a victim seeks restitution and the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record.

Earlier today I asked a question about this and it actually revealed something really interesting to me. I am not a member of the committee, but I followed the debate very closely.

This basically says that if a victim wants restitution and the court decides not to do a restitution order, the court has to give reasons. I asked, why should the court not give reasons in all cases of fraud as to why it is not ordering a restitution order?

It would make some sense to me that people have to know why the courts do what they do and why they have made certain decisions. It may mean that it is very clear that there are no assets, but the fact that a victim has decided for whatever reason that he or she is not going to seek it does not mean that he or she is not entitled to it and should not get it. In this particular case, it is simply a matter that if the court is going to decide that it is not going to make a restitution order, I thought in all cases it should give reasons for its decision.

I raise this because the chairman of the justice committee spoke earlier, and has asked a number of questions, basically encouraging people to stop talking and just vote and pass this bill because we are delaying it, after the Conservatives wasted over a year with all their shenanigans and here we are finally getting a chance to talk about this bill.

It was one of those moments when somebody says that there is a reason it is there. I had to find out and I went and asked somebody.

The parliamentary secretary did not indicate, but as it turns out, the reason this is here is that one of the intervenors was the Canadian Bar Association, which said we needed to put this in. Effectively what this does is relieve the courts from a requirement to do a restitution order and to write up the reasons for its decision if the victim seeks restitution.

Now we are talking about money. We are talking about the Canadian Bar Association saying this will bog down the system if all of a sudden the courts have to explain their decisions in cases where they said it would not affect the victim so they would just move forward.

It does raise the point, and I know a number of members have raised it in debate already, that we have cases where the Government of Canada, the federal government, passes legislation and then it gets promulgated, it becomes part of the law, part of the Criminal Code or other legislation, and then it is up to other jurisdictions to enforce the laws. We have cases now where even the smallest thing about saving some time for the courts, so they do not have to write up reasons for decisions on restitution orders, will save them money and it is worth doing and it is worth changing the bill to make sure that they can save a little bit of money. That pales in comparison to what is happening out there in the real world.

We have heard a lot about Ponzi schemes, basically pyramid schemes of a sort, and about Bernie Madoff. It is in the news every day and I do not have to say anything more there. Earl Jones is another one, where 150 clients were defrauded of some $50 million; he was sentenced in February of this year to 11 years.

One person who has not been mentioned is a Canadian case, Tzvi Erez, who is a very renowned pianist. He got involved in a so-called Ponzi scheme and he defrauded 76 investors out of $27 million. This is not insignificant and this is precisely what the bill is supposed to deal with, right? Wrong. The charges were dropped in this Ponzi scheme of $27 million, the reason being that the police made the argument that either we want them to deal with the rape case or the homicide case or we want them to deal with the Ponzi case. We made the decision that it was more important for us to deal with a rape or a homicide. It would take far too long. It was a very complicated scheme. It would take years to do and would be very costly. It would drain the courts and so many cases would not be dealt with. Does that not tell us something?

The Canadian Bar Association says it does not want the courts to have to give reasons for a decision, because it will save them a little bit of money. The police in Ontario and Attorney General Chris Bentley are basically saying they do not have the resources to deal with someone who defrauds Canadians of $27 million.

How can we say that we are being tough on crime and those criminals when, within the system, in a case such as that, the magnitude of that, the charges will not be pursued?

I am not sure that the people who were defrauded are very happy about that. I am not sure of their personal economic circumstances, but obviously there are only 76 of them representing $27 million, so they are significant investors. But we do not discriminate against people in their financial situation. People who are in good shape versus those who are living from paycheque to paycheque are covered by the law equally and things should be done, but the fact is that this was a matter of the courts in the provinces not having the resources to be able to enforce the law. How is that possible? How is it possible that we get to those situations?

We have now in the Criminal Code that fraud over $5,000 is actually subject to a maximum term of 14 years. But in this case, Bill C-21, the only difference between that and dealing with it under existing law is that Bill C-21 provides for a mandatory minimum of two years. If that is the only difference and we have cases that are being thrown out because the provincial courts cannot enforce the law, how can government members say this is their bill, Bill C-21, and they are very proud of it?

The short title, which happens to be much longer than the actual title, is the “Standing up for Victims of White Collar Crime Act”. It is not. In fact, it is a sentencing bill and it amends the sentencing.

It says that if it is over $1 million in terms of aggregate value of which people were defrauded, a mandatory minimum may be applicable. But time after time, members of the justice committee got up and said that the penalties being given out in the courts now when those cases are heard are well over two years and that this mandatory minimum is really not going to achieve very much. So how can they boast that they are taking care of victims of white collar crime when this bill, with all the work and all the time and all the complaints about delay, in fact does very little and is going to affect very few cases? Even if there is not a mandatory minimum, using the court's discretion they can get up to 14 years anyway.

People should be a little disappointed that the government doth protest too much about delay of this bill, because any delay that has occurred in this bill has been the government's doing by various things such as prorogation and by stacking up bills, and I want to talk a bit about that.

As I said, someone did an analysis and found out that 15 justice bills could have been done in three omnibus bills, because bills that relate to the same sections of the Criminal Code or other justice matters can be combined, when they have the same or similar elements and we are going to be dealing with the same witnesses, the same intervenors and public interventions as well.

If that is the case and if the government really wants to show that it has the public interest at heart and that people who commit wrongdoings, who commit serious fraud, are going to be dealt with on a timely basis, it would say that will be shown when legislation actually passes. But we have not had very many of these bills even pass, because of all the delays and the lumpiness of the parliamentary calendar. We just seem to have these breaks, and now there are rumours of a spring election and maybe most of these bills are going to die. There will be another Parliament and these will be back again with the same slogan: “We are getting tough on crime”.

They cannot be tough on crime if they cannot pass legislation that is going to be effective. They cannot be tough on crime if the provinces that are responsible for enforcing it do not have the resources to apply the law and they allow people to get away because they cannot lay those charges.

If one is not part of the solution, one must be part of the problem, and what I heard today from a number of members was that we need a strategy.

I thought one of them was fairly comprehensive. I am not going to repeat it, but one of the critical elements of a strategy is to have these kinds of cases dealt with by a joint task force such as the RCMP and other agencies that have experience and expertise in dealing with serious fraud and complicated schemes. To go through the regular process has been a problem and that is where the money goes, but if we have an efficient system of processing and we have this expertise built up, these laws can be enforced. But we need to work with the provinces and other jurisdictions that are involved, because there is no point in passing laws that will never be enforced or in fact never passed because a government is really only interested in recycling them for the same purpose of having a political slogan about being tough on crime.

It is not honest to tell Canadians that, and if Canadians would look at the transcript of the debate today, they would see significant examples and testimonials from members of Parliament that in fact the government has been using these bills for political purposes rather than for the best interest of Canadians.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, the member talked about organizations like the RCMP that are doing a great job in tracking down these criminals and bringing them forward to the courts.

In Ontario, we have an excellent organization based out of North Bay called PhoneBusters done by the OPP. It has been an active organization in trying to protect our seniors from many of these things that relate to white collar crime.

One of the things that we want to see strengthened in this bill is the way that individuals who have been taken to the cleaners, so to speak, by Ponzi schemes or these organizations that are phoning and taking advantage of these individuals, are compensated. We want to ensure that under section 738 or section 739 there is adequate compensation for victims.

We believe that when someone takes something from an individual there should be compensation. We believe that this part of the legislation should be strengthened. I would like the hon. member to comment on whether he agrees that we should see this part strengthened in the bill.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, generally speaking, the law is based on the fact that if a crime is committed, the victim should be, to the greatest extent possible, put back in the position he or she would have been in had the crime not occurred. That is a principle of law that is there. Clearly, that is our wish as a society and our value statement.

The bill does include a restitution statement. It has a form here in which various things have to be described, for example, what victims were defrauded of, the amount of the loss, the evidence, et cetera. However, it is still up the court. If this was a lifestyle thing where somebody defrauded $1 million from someone, spent it or gave it away and there was nothing to take back, then it becomes: How do we get something out of nothing? In the Madoff case, there was argument that victims could go to other family members who were beneficiaries of some of the largess.

What about the people at the top end of the Ponzi scheme who got in early, like in a pyramid scheme? They would have received usurious returns on their investments. They may not have received their capital back but they may have received even more than the value of the capital. Would they not in fact be accomplices in the Ponzi scheme knowing that they were getting usurious returns and should they not be held accountable for not reporting?

I understand another value of the law is that if we become aware of a criminal violation, we have a duty to report it to those who can figure out whether there was in fact a breach. That is not covered here either, not explicitly, but I would hope that in the courts it would be taken into account that there may be many accomplices to some of these frauds.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member just touched on an important difference between Canada and the United States.

There are several cases in the U.S. but I will talk about the case of the Southern Baptist Council where there were millions and millions of dollars involved in a Ponzi scheme there. What happened is that the early investors who received these enormous returns had to, at the end of the day, give all the money back. The result was that the investors overall were able to recoup, I think, 40¢ to 50¢ on the dollar. They were not entirely happy about that but at least they got something back. That happens and has happened many times in the States.

Fundamentally, it is all about regulations and the regulatory bodies. The regulatory body here in Canada has been asleep for years. I want to quote from an article from Canadian Business Online dated September 27, 2007. It reads, “Canada's losing war against white-collar crime”.

The author was talking about the RCMP's launch of the integrated market enforcement team, which I talked about earlier, that was started under the previous government in 2003. It had only five convictions in five years and yet in the United States 1,200 convicts are in jail because of its laws.

He goes on to say:

Just ask people on Bay Street who they are afraid of. It’s not the cops, it’s not the OSC. It’s the U.S. Securities and Exchange Commission because they have real teeth.

Is that not sweet? The Canadian Bay Street investment community is not afraid of the cops in Canada and not afraid of the Ontario Securities Commission but it is afraid of the United States Security and Exchange Commission which has real teeth.

Regulation is the problem. We keep appointing people to the regulatory bodies who golf and go to Christmas parties with the people they are supposed to be regulating.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, that is very interesting. I do not have any information to add to that nor do I have a comment.

However, I would say that there are other circumstances that concern me about the bill and I will take the opportunity to give one now.

The bill would provide mandatory minimums of two years, not only for the person who perpetrated the fraud but for any accomplices. What would happen if there was an office where the Ponzi scheme was being operated out of and there happened to be an employee who was a single mom with three kids and somebody said that she knew or ought to have known that this was not legal and that she was being charged as well? There would be no restitution for that mom. This legislation would put that mom in jail for a minimum of two years and maybe more. I am not sure whether that has been taken care of.

When we put in a mandatory minimum and we deal with names of seniors and so on, we are talking about human beings where there may be exacerbating circumstances or mitigating circumstances. This legislation would not provide for that. It is unfortunate but most people who have spoken to the bill have basically said this is not a very substantive bill. It is tinkering with sentencing.

However, I hope the judicial system will have sufficient discretion to ensure that people who are somehow drawn into this, either coerced or otherwise, unwittingly do not have to suffer two year mandatory minimum sentences through no fault of their own. It is a dynamic and it is one of the reasons that I have some difficulty with mandatory minimums.

The courts have always had the discretion but the government does not trust the courts. As a consequence, it believes that the solution to all problems is mandatory minimums and fill up the jails with unreported criminals.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, white collar crime is a serious issue, both in my riding of Sudbury and across Canada. It is a shame that the government has presented us with a weak bill to try and tackle this problem. We believe the government could have sat down with all three opposition parties and brought forward world-leading legislation to deal with the real problems facing Canada.

That does not mean that I will not support the bill. I believe that this legislation is an improvement over the status quo, but it does not remove the need for a debate like this. The public needs to know that we understand the shortcomings of this bill and that there are parliamentarians who are saying that this is a start but that alone it is not enough. The government needs to know that even though we will support this legislation we expect more.

This bill is actually the reintroduction of a bill in the last session of Parliament that was killed when the government decided to prorogue last winter. At that time, the government knew that this bill had support from all parties. Then, when the House was finally allowed to resume, the government brought forward other bills, other crime bills, which could not get through the House, as this bill will.

Too often, white collar crime is portrayed as a victimless crime. This simply is not the case. I remember when the previous version of this bill was debated in the House, my colleague from St. John's East, in answer to a question I asked, told us of a case in his riding where a funeral director in his riding took the money people had given him for their funerals and used it to fund his own lavish lifestyle. Unfortunately, as shocking as that story is, it is not an isolated incident.

I have heard from far too many seniors in my riding who had invested their money with someone they thought could be trusted to manage their investment only to find out, once it was too late, that they had been scammed.

An unfortunate example of this occurred in my riding in Sudbury about 10 years ago from the Montpellier Group. Pierre Montpellier was fortunately found guilty after he was extradited from the U.K. However, there were many seniors and families whose lives had been turned upside down by the loss of hundreds of thousands of dollars and, in some cases, less than that. Although it was not the million dollars that we talked about earlier, it still had a huge impact on their lives.

White collar crime all too often targets those who have very little. Those investing large sums of money have the money and the time to protect their investments. However, those who have worked hard their whole life to save a modest amount for their retirement or to ensure they would not be a burden to their family once they passed away, simply do not have that luxury.

It is no wonder then that Canadians are worried about white collar crime. There are questions we need ask ourselves when we try to tackle white collar crime. First, will the legislation stop white collar crime from taking place either by providing safeguards for people when they invest or by deterring people from committing such crimes? Second, will the legislation help the victims of white collar crime?

In regard to prevention, we believe this bill is weak. The prime ticket that the government is pushing this bill on is the mandatory two year sentence for all criminals who commit white collar crime valued at over $1 million.This plays well in the media but does it actually do anything to deter criminals?

The problem is that the government is happy to make this type of bold statement about mandatory sentencing because it knows that without extra funding and support for investigating and prosecuting white collar crime, this law will make very little difference.

My colleague from Windsor—Tecumseh pointed to a case earlier today, in a question for the Parliamentary Secretary to the Minister of Justice, of the investigation into a Ponzi scheme in Toronto where between $23 million and $27 million were stolen from almost 100 people and that three weeks ago the prosecutors withdrew all the charges.

The fact is that we can make all the changes in sentencing we would like but,with limited funds and time, prosecutors are always going to choose to pursue other types of criminals where the trials take less time and are far less complex.

More than that, this mandatory sentencing certainly will not deter the small-time criminal who steals $2,000 from seniors. The fact is the consequences of that type of crime are as severe, if not more so, than someone who steals $1 million from a $1 billion corporation.

If the government contends that this mandatory sentence would deter criminals, which is a very wide-ranging conversation, and if we accept the government's position for argument sake, then why are we only deterring crime against the rich and big corporations? Regardless of whether this works, this type of provision sends a message that the government is more concerned about protecting their friends on Bay Street than hard-working families from this type of crime.

What should the bill have done in this regard? The best way to have created a deterrent to white collar crime would be to have made it easier to prosecute such crimes. The real threat of any jail time would have been far more likely to deter would-be criminals than the threat of longer jail times that many feel they will never serve if they do not plead guilty. For this to take place, we need to streamline the method of prosecuting white collar crimes and invest in resources like forensic accounting and extra training for judges on the specifics of presiding over cases of white collar crime.

White collar crime is not a spontaneous crime. It takes a lot of planning to carry out such illegal activities and the people who carry out these crimes are very aware of the possible penalties as well as the chances of avoiding them. Increasing the penalties to these people, while keeping the probability of them being enforced, does not deter people as much as we could by increasing the likelihood of persecution.

Let me tackle the second part of my own question. Does this bill provide help or support, either emotional or monetary, to the victims of white collar crime? There are two provisions at first glance which would appear to fit this criteria. The first is the provision for a community victim impact statement and the second is in regard to monetary restitution to the victims of white collar crimes. However, neither of these provisions, in my opinion, go far enough.

Let us look first at the community victim impact statement. This is almost unheard of in criminal convictions. Previously only individuals, be they people or individual corporations, made victim statements. However, this provision allows a whole group of people to come together and have a single representative explain how they as a community have been affected by a crime.

Many individuals feel or can feel very daunted by the legal system. Having the ability to speak as a group should mitigate some of these concerns and therefore allow people to have means to address their emotional distress without causing more distress. I know from consultations with my constituents that many victims have asked for this type of provision before, so there are definitely many positives in this.

However, as this is the very first time that a provision like this has been used in the Canadian Criminal Code, I am disappointed that there are not more guidelines on how this would work.

In many ways, this is a judicial experiment, so we cannot say how this will work in the future, but there is no explanation of who can represent the community or if more than one community representative will be able to present to the court. All these questions are left to judges to work out for themselves. This could actually make it more difficult for judges presiding over already complicated cases, which is certainly not something anyone but the criminals would desire.

As I have already alluded to, lack of resources is already a problem in these cases and we do not want to add to the problem. There is also a question of cost for the victims in appointing representatives. Many people have lost their life savings, so we need to ensure this does not become a tool for only the rich to have their voices heard in criminal proceedings.

Second, with regard to restitution, the provision in this bill states that courts “shall consider making a restitution order under section 738 or 739”. There is therefore nothing in the bill to compel offenders to compensate their victims. In fact, this provision does nothing new because judges already have the option to order restitution under these sections of the Criminal Code. These judges have been practising and studying the law for years. It seems bizarre to remind them that they are able to use sections 738 and 739 in this way.

What the government could have done, rather than referring back to existing methods of restitution, was to have used the bill to compel judges to seek restitution for the victims of white collar crime. These victims have been wronged and it is only right that the court seeks to address this loss. The way the provision is written now changes nothing for victims. It appears to be only in the bill for political reasons rather than good policy.

There are some good provisions in the bill with which I have no problem. For example, the proposed bill also allows judges to take aggravating factors into account when sentencing white collar crimes. Yes, most judges have already been able to determine when aggravating factors are important in a case, but by formally laying these out in the Criminal Code, we will remove any grey areas and formerly authorize judges to take those factors into account.

However, as I have laid out in this speech, many of the provisions in the bill are simply not strong as they should or could be. This is not to say that they are bad provisions, but when we bring forward legislation like this, we should strive to pass the best legislation we possibly can.

I hope we can pass this legislation and at least take the first small steps to deal with white collar crime. It is my real hope that the government will work with the opposition parties and bring forward new legislation in the near future that deals with the problems I have highlighted today.

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Madam Speaker, I appreciate the comments of my colleague from Sudbury and his support for the bill.

I want to touch upon the community impact statements and the restitution argument. In terms of community impact statements, the bill includes provisions to permit the court to receive a community impact statement that describes the losses suffered as the result of a fraud by a particular community, such as a neighbourhood, a senior centre or a club.

Perhaps the member could expand on what more detail he would want or perhaps his suggestion in terms of how the government would proceed in terms of specifically ensuring that these community impact statements are both received and acted upon.

In terms of restitution, which is the second point I want to raise, requiring judges to consider restitution from the offender in all cases of fraud involving an identified victim with ascertainable losses, judges would also be required to provide reasons if restitution is not ordered. I think this addresses the concern the member has raised. It allows judges some discretion, but then they have to provide reasons if restitution is not provided for.

Could the member comment on those two items and add more specificity to his critiques?

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, relating to the first piece with the community impact statements, we agree that this is a positive step in the legislation. However, we were asking for a little more criteria to be provided to the judges. If the judges are presiding over a case, that there is a little more instruction for them to have a better understanding as to whether they have a community group of people and whether they are allowing more than one person to speak on behalf of the community.

We understand that people are allowed to come forward and feel confident to address the court. Some people do not have that confidence. The community impact statement allows for that, but we would like to see more guidelines in place to provide the judge with the necessary criteria to explain those to the community impact statement.

When it comes to restitution, the point the member brings forward is something I would like to look further into before I can comment on it. He brought up a valid point and I would like to read a little more of it.

[Justin Trudeau, Liberal, Papineau, QC]

Madam Speaker, it seems that every time the Conservative government tries to bring in a tough on crime bill, it jumps immediately to mandatory minimum sentences. The member made some strong comments about why mandatory minimum sentences would not be particularly effective in this case. I would like him to repeat them. It is important that we emphasize just how tough on crime, according to the government, is not really smart on crime.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, my hon. colleague from Windsor—Tecumseh, our critic on justice issues, said this morning that mandatory minimum sentences in this case would be beneficial because of the $1 million penalty.

For clarification, this morning we were talking about this in debate and we are in favour of mandatory minimums for this type of crime.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, both in my speech and in the speech of the member for Windsor—Tecumseh we talked about the need for us to look at the U.S. practice, particularly as it applied to Ponzi schemes and in reference to the southern Baptist fellowship and the millions of dollars that it lost.

The American practice is to go after those initial investors, who made good money on a Ponzi scheme, and get them to return the money. In the case of the southern Baptists and another case that involved a northeast organization, they were only too happy to return the money once they realized they were involved in a scheme. They had no knowledge of a Ponzi scheme going on until it was broken. We are looking for best practices and where we see best practices, we should be supporting them.

The regulators are the problem. Canadian regulators are pretty much non-existent. When we get to the point where people on Bay Street are not afraid of the Canadian cops, are not afraid of the Ontario Securities Commission but are afraid of the United States Securities and Exchange Commission, it means the U.S. has a much tougher regulatory regime than we do. The U.S. is able to catch these schemes before they develop into disasters.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, my colleague's intervention relates to a few things about which we have been talking.

Part of the legislation talks about mandatory minimum sentences if a crime is over $1 million. What do we do about seniors who have lost $100,000 of their life savings because of a Ponzi scheme? Does that crime not require severe punishment? Have their lives not been turned upside down?

When we talk about tougher legislation, we would like to see it become more difficult for people to take part in this kind of crime. When these criminals plot these cases, they do not think a senior will give them $100,000 after a telephone call. They actually put a lot of thought into this.

Our police forces, including the RCMP and great organizations like OPP PhoneBusters, do great work. We need to ensure that when law enforcement officers catch criminals who are fleecing dollars from our seniors and investors, that resources are available to prosecute these people. We have to ensure people have the necessary training to preside over a case so these criminals can be put behind bars to serve their time.

Our colleague from Windsor—Tecumseh and my colleague from Mississauga South told us about a case where $23 million to $27 million was taken from approximately 100 people. The prosecutors had to drop the case. We need to start looking at where we can put those resources to better serve Canadians.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, members of the government have asked us why we were debating this bill. We are debating this so Canadians can understand that a bill is just not a bill into itself. It has to be read to be understood. Many more pieces have to be looked at to understand the thinking. There may be some deficiencies and we can look at them later.

One speaker recommended reorganizing the police to deal with these types of crime. In other words, banks would be required to report irregular transactions and we would start dealing with tax havens in regard to these types of schemes. There is so much more to do.

It is not in the bill, but there should be a provision dealing with some of these related criminal offences.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I agree. We need to be doing more to stop the tax havens. I mentioned some of the things in my speech. We need to ensure that this legislation would actually stop white collar crimes from happening. I do not think there is enough in here to deter the criminals who plot for weeks and months how they can fleece people for more dollars.

At the end of the day we need to look at who is being affected by white collar crime. It is average Canadians who work day in and day out and put a bit of money away for their golden years. We need to ensure they are the ones who actually have golden years, not some criminal lying on a beach somewhere living a life of luxury because he has millions in the bank.

I would like to see more teeth to this legislation. Members from all parties can work together to ensure that we are protecting Canadians.