Mr. Speaker, I am pleased to intervene on debate on Bill C-21. I don't think I had the opportunity in the previous session.
What I first thought about the bill, I will be honest, was that the government was approaching the Criminal Code and its need for occasional reform as a kind of a smorgasbord. One time it would take a section over here and fix it up and then take another over there, and by the time we are finished.... I think our order paper shows a number of Criminal Code amendment bills at this time.
I thought it is taking a lot of parliamentary time and it is a lot of procedure. Why did the government, if it wanted to make some Criminal Code amendments, not put them all in one bill? We could have debated it and dealt with it that way.
The government chose not to. I thought it was for political reasons and I still do. However having viewed the process, I see that it actually gives the House an opportunity look at each of the bills more closely. Sometimes that is scary and sometimes that is helpful. At least it gives us extra time to debate. If the government had a Criminal Code amendment bill with 10 or 20 components, most of us would be unable to address most of the components, if we wanted to.
Looking more closely at each of the bills will probably tilt toward a better product. Perhaps a bill with more scrutiny has fewer problems down the road and is less likely to encounter difficulty in the other place, should the Senate pick it apart, and is more likely to be successful in the real world when the police and the courts deal with the new legislation.
This particular bill deals with sentencing for fraud, and it modifies the Criminal Code provisions related to fraud convictions. My party is supporting this in the context that a bill of this nature was probably inevitable over time.
If we look back over recent history, we wonder why something like this had not come forward sooner, but looking at the evolution of fraud crimes we also have to look at the evolution of financial services. If we look back at it, we can see how complex the evolution has been since the second world war.
I was not here then, happily, but before that we had basically cash and cheques, some kind of a postal money order and bank money orders. That was a simple financial world. However since then, this has proliferated. We do not just have cash, cheques and money orders. We have credit cards, debit cards, ABM cards and cash cards that actually hold a cash value and we can spend the cash value. There is a whole area of financial species that a fraudster could focus on.
We also have a whole new world of online Internet financial transactions. We even have online gaming, charities online, fake charities online and shopping online. In the world of securities we have stocks, bonds, GICs, T-bills, life insurance, pension plans and pension plans that are self-administered. All of these are financial envelopes, many of which did not exist 50 years ago, where the bad guy is still out there trying to get a piece of the action.
Even in our own federal financial envelope we have RRSPs, home ownership savings plans, RESPs, RRIFs, savings accounts, chequing accounts and all manner of other investment accounts. The average person might be forgiven for getting lost in this whole area of financial expansion.
In addition, the world of finance has gone global. It is not just bad guys here but it is bad guys internationally. The financial world has expanded in a huge proliferation.
In addition, something that happened somewhat slowly, which we did not notice, was that since the second world war we have all become a lot more wealthy. We in this country take for granted the wealth that we generated. The GDP per person has gone up, if not exponentially, very favourably. Canadians are much wealthier than they used to be.
These trillions of dollars of wealth, financial transactions by individuals, corporations, government and charities, have increased the opportunity for those who would steal from us to go ahead and do it in many different ways.
Fraud is essentially the criminalization of the old tort of deceit. Fraud is when someone intends to enrich himself or herself by taking money from another individual by deceit. That was the simple concept of fraud. However, with the backdrop of this proliferation in financial services and wealth and globalization and inter-con activity enhanced by the Internet, that basic law of fraud has stayed the same.
Although we are proposing an amendment now dealing with the sentencing for fraud, it would not surprise me at all that we would see a further change in how we approach some of the crime in the area of financial services shopping because It is quite likely that the bad guys who are doing this now will continue to do this and will find ways to disrupt and steal from innocent Canadians.
In the bill, there is reference to a restitution procedure. It has been in the code as a sentencing option for some time now. It is not used frequently but it is used. Bill C-21 contains a restitution procedure and some forms that are contained as a schedule to the bill, by which a victim of this type of fraud can ask the court for restitution. I have some concern about this. I am not suggesting that it will not work but it may have some break in problems.
The first issue that I want to flag for the consideration of members both here in the House and on the justice committee is that the reference to restitution in the courts under this bill does not really say who would be in charge of the process. It does not say that the crown prosecutor would be in charge of this process. It just seems to say that if someone wants restitution, he or she will need to fill out the form and send it in.
Our criminal courts are not used to this. I am not saying that this will happen but I have this vision of a criminal court starting to act like a small claims court. The prosecution is complete, there is a conviction and then the judge turns to the clerk and asks whether there are any requests for restitution. The clerk will say, “Your Honour, we have 728 applications for restitution, totalling $1 million.”
Of course the judge has spent his or her career convicting people, not as an accountant. Judges do not have calculators on their desks. They do not have the time to go through 728 restitution applications. So there is an administrative function here. That was the second point.
Third, there is this restitution function and an application form of sorts. It is a fairly brief application. There is nothing wrong with it. It is kind of short and simple. It does raise the expectation of the victim, who may be one of many, that he or she will get restitution because he or she has been invited by somebody to fill out the form and send it in the judge. The judge has the form, the form is filled out and it says that $7,528 is what this guy stole. It raises an expectation that the court will be able to deal with this.
I do not think that criminal court judges would be ready for that, although some of them have handled restitution orders previously, but it will need a kind of a management system. In fairness, the federal government does not manage these courts. It is done by the provinces. Therefore, the provinces will need to generate some system. They will need to hire somebody who will to understand this and manage all of these forms and requests for restitution that come in.
While it is certainly part of the Criminal Code, it will fall to the provinces, the crown attorneys, the court clerks and the judges. I am pretty sure the judges will resist the criminal court becoming a small claims court or the equivalent of it. They will say that if they want to do small claims court stuff in the criminal court, then they should bring in a small claims court judge.
I do not know if that will happen. We will wait and see. I wanted to flag that and the higher expectation that might be there on the part of the victim that he or she would receive restitution simply because he or she followed the rules, filed the form, put in the amount and are hoping the judge will give them an order.
Last, I will deal with the restitution exercise. I hope the Department of Justice will be able to describe at the committee hearings the impact of a bankruptcy or likely bankruptcy on the whole restitution procedure or on the order. Will a concurrent or subsequent bankruptcy mean that the restitution orders are worthless? If they are worthless, it is probably not worth the time to spend a whole lot of administrative hours, court time and the judge's time sorting out the restitution if, in the end, there is a bankruptcy.
At some point, someone administratively will need to identify some assets or an asset that could produce a recovery for the restitution claimants, that issue of the relationship between the restitution order and a concurrent or related bankruptcy.
Also, and this is really a bankruptcy issue, which is federal, but let us say that the crook has transferred some of these assets or the proceeds of the assets into the name of a relative. What jurisdiction does the court or the judge have in relation to those asset transfers or the hiding of those assets in the face of a restitution order?
One of the members spoke earlier about this getting very close to some of the organized crime sentencing procedures and proceeds of crime legislation that already exist on the books.
I do not know whether these aspects have been sorted out or whether the provinces and the crown attorneys who will need to administer it have been consulted on this. I am not objecting to restitution orders but this legislation seems to be importing a fairly conspicuous wholesale procedure. We know that in some of these cases the frauds can go into many millions of dollars with many people being hurt. While the new sentencing provisions are intended to target the big-time fraudster, the million dollar threshold is described in one part of the new law, I think there may be a learning curve here, if I can put it that way, and possibly there may be further legislation needed if the courts are going to get seriously into the restitution procedure.
Another of our colleagues was good enough to mention crime prevention, as my colleague from Moncton—Riverview—Dieppe did. This legislation deals with the crime and the effects of the crime after it has taken place. It is closing the barn door after the horse has left. While there is a role for that, while it is drawing a line in the sand for our society, there is nothing in the statute that appears to reach out and deal with some kind of prevention of crime in the first place. It does not get out in front.
As a society, I think we will need to invest a bit more in crime prevention. If we can cut some of these massive frauds down by half, one-quarter or one-third, that would be worth it, but we need to invest institutionally in methods, which means looking to our securities regulators, bank regulators, chartered accountants, lawyers, real estate brokers and mortgage brokers. Most of these organizations self-regulate and we need to look to them. I am not too sure about the process but somewhere in that administration and regulation of those professions and institutions we will find some ways to spot a big fraud early.
As members know, many of the big frauds do not actually start out as big frauds. Many of the big ones started as quite small and then, once the mistake was made or the money stolen, however small it was, more money is taken to infill and to hide and it grows. It gets to the point where the crook, who may not have set out to be a crook in that sense, ends up robbing Peter to pay Paul and moving all kinds of money around and harming so many people. If our regulatory mechanisms could spot some of this in the early stages, it would go a long way.
I recall in Ontario a very sad case of a guy who was selling fake franchises. Even though that is provincially regulated, a way has not been found to prevent that kind of fraud. However, at the end of the day the principle of caveat emptor must remain. The buyer must beware. We must ensure our citizens are educated, sensitive and wary of these kinds of things. That type of public education is very valuable.