May 7, 1993

GOVERNMENT ORDERS

SEIZED PROPERTY MANAGEMENT ACT

PC

Donald Frank Mazankowski (Deputy Prime Minister; Minister of Finance; Vice-President)

Progressive Conservative

Hon. Don Mazankowski (for the Minister of Justice) moved

that Bill C-123, an act respecting the management of certain property seized or restrained in connection with certain offences, the disposition of certain property on the forfeiture thereof and the sharing of the proceeds of disposition therefrom in certain circumstances, be read the second time and referred to a legislative committee in the Departmental envelope.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Douglas Grinslade Lewis (Solicitor General of Canada)

Progressive Conservative

Hon. Doug Lewis (Solicitor General of Canada):

Madam Speaker, I must say that I am extremely pleased to speak to this bill. That may sound strange, but this bill has been in the preparation stage for an awfully long time and I am pleased that it is now introduced in the House so we can deal with it.

This bill gives the government the authority and flexibility to deal with property which has been seized and restrained from the time that takes place until the property is forfeited under the Criminal Code, the Narcotic Control Act or the Food and Drugs Act.

This is a bill the importance of which will probably not be readily apparent to Canadians, but it will be greatly effective in improving Canadian society. It is an essential part of our law enforcement strategy.

This bill manoeuvres around technical and legal obstacles behind which organized crime hides the profits of the drug trade, international smuggling or other serious

crimes which attack our youth, industry and society as a whole.

Where criminals are able to conceal the profits of then-activities it is no secret this is used to further more crime. Organized criminals have long attempted to invest the proceeds of their crimes in legitimate business thus erecting a front for their illegitimate activities and providing a permanent and well-hidden camouflage for their crime-raised money.

Bill C-123 adds to the legislative tools given law enforcement officers from coast to coast in stripping criminals of their cover by facilitating the management of seized assets until they are forfeited and then facilitating their sale.

In 1989 the Government of Canada first enacted proceeds of crime legislation. The purpose of the legislation was to take action against organized crime, particularly drug trafficking and money laundering.

At that time we put a great deal of focus on the process whereby we seized property and forfeited it because we were concerned about taking away people's property. I think we got that right but this bill corrects the manner in which it is managed while it goes from the point of seizure to the point of forfeiture.

It is a weapon in crime prevention that we think will help to counter the growth of the drug trade because putting the profit potential of crime at risk will not only reduce the motivation for traffickers but will also undermine the ability of organized crime to use its accumulated profits to further finance trafficking endeavours.

From 1989 to the end of 1992 the RCMP seized some $76.3 million in suspected proceeds of crime. In the same period the courts forfeited approximately $17.7 million and levied fines of $12.5 million.

The types of assets that have been seized are what make this bill so important. There is no trick to managing a bank account. That is easy. What the RCMP and other police forces are dealing with are assets such as cars, airplanes, boats, homes and businesses. It is difficult to

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manage them and maintain their value after seizure, before forfeiture and up to sale.

This act balances the Proceeds of Crime (money laundering) Act which was enacted in 1991 and which provided another set of measures to strengthen the ability of the government to use the proceeds of crime provisions effectively.

I have to say that despite the creation of these legislative tools the proceeds of crime policies have not been maximized, and that is what we are attacking in this bill.

One of the reasons we have not been able to maximize it is because there has been an absence of a coherent and effective asset management regime pending the forfeiture of the seized assets. The management of seized assets requires considerable human and financial resources, particularly where real property or ongoing businesses must be managed.

Unfortunately the proceeds of crime legislation did not clearly allocate responsibility for asset management, nor did it adequately address the need to allocate the legal responsibility for the maintenance of restrained property and the need for clear authority to advance funds as may be necessary to maintain property or compensate creditors.

It is one thing for Treasury Board to manage the operations of the government but it is quite another thing when Treasury Board is asked to advance moneys through the RCMP to make sure a ski hill is operating effectively. Those are some of the difficulties we are dealing with. What we are trying to do with this bill is to correct things.

As well as managing the assets I think it is fair to say there has been a strong demand for equitable sharing of the proceeds of crime, both domestically and at the international level.

My notes say that there is a perceived disincentive to co-operation on the part of provincial and local governments whose police forces have conducted long investigations in support of federal prosecutions. There is no question that it goes beyond a disincentive. It is something that has been advanced to me by municipalities across the country in my capacity as Minister of Justice in 1989-90 and as Solicitor General for the past two years.

I would not say that our police forces at the municipal, provincial and federal levels are not doing drug investigations the way they might. I would suggest that they see a much greater opportunity to put more focus on drug prosecutions and really turn the screws on these people who are making money at the expense of the public.

I want to point out that when the question of asset sharing with municipal and provincial authorities has come up, I have maintained two very strong positions. Number one, I believe that they should be shared according to the input into the solution of the crime with a certain amount for the financing of the bureau of asset management. That is fine. We are looking at 10 per cent there.

I believe in sharing with the municipalities and the provinces. I do not believe in the provinces having any control over how much goes to the municipalities. We should have an independent authority saying: "All right, this crime had a third input each by the RCMP, OPP and metro Toronto police, and it should be shared that way". That is the way I feel about it personally and I want that clearly on the record of this House. It should be shared according to input.

The second point I want to make personally is the distinction. It should not go to the actual police force. It should go to the taxing authority that is in charge of the budget of the police force. It would not go to the metropolitan Toronto police force but to the metropolitan Toronto police commission or whatever. It would go to the body that funds the police operations.

In addition to the problems I have just spoken about, the current proceeds provisions in the drug area provide for the disposition of corporate proceeds by the minister of health and welfare. I think it is fair to say this is not a function of which the minister of health and welfare in any government would be the main focus of their activities. If we combine it in legislation which puts a better focus on it and more specific responsibility then we will have a better operation.

There is also a problem in cases which are prosecuted by the provincial attorneys general. Bill C-123 provides for a correction of that. The bill provides for the creation of an office within the Department of Supply and Services which will operate on a cost mutual basis and whose primary task will be in federally initiated prosecu-

May 7, 1993

tions to manage seized, restrained and forfeited property up until the time of its sale or other disposition.

The act also provides for the sharing of corporate assets within and outside of Canada. The office will be established by the Minister of Supply and Services to allow that minister to have custody and management of any property falling under the scope of this legislation.

Once the office has possession or control over the property it will have the power to manage it in the manner it considers appropriate up until the time the property is disposed of. This includes the advancing of money at a commercial rate of interest if that is necessary to maintain the ongoing operation of the property. It is also anticipated that the office will contract out to the private sector for most of the management services required.

I will give the House an explanation of this and how it will work. If for example the RCMP is about to seize 10 video stores in Vancouver, the idea is not that 10 bureaucrats from Ottawa will fly to Vancouver and operate the video stores while they are going from seizure to forfeiture.

My conception of this as a chartered accountant is that we bring in receivers in bankruptcy. They are in the business of doing this. If that seizure were to take place in the city of Vancouver one would go to a receiver in bankruptcy and contract with it to have people on the ground in that area who do it most effectively rather than create a bureaucracy to be able to jump in and do those kinds of things because the private sector is in the business of doing it.

As well, the office will provide consultative and other services in relation to the seizure or restraint of property in connection with designated drug offences or property that is or may have been obtained through the proceeds of crime.

It is also important that under authority of this bill we will have the ability to share the forfeited proceeds of crime with domestic governments or with foreign governments. This is important because we have to realize that international crime is just what it is, international crime. We co-operate with many other law enforcement bodies and as we receive proceeds it is important that we

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be able to share with the international governments that have helped us.

In the past we have been the beneficiary of money. Specifically, last year we received approximately a million dollars in U.S. funds from the proceeds of a joint crime investigation. We have the ability to receive but we do not have the ability to reciprocate. I think that is very important.

I think we have the management down. I think we have a regime in place for the sharing of the proceeds and regulation will come forward on that.

As well, the legislation corrects an anomaly that currently affects the provinces of Quebec and New Brunswick. In most of Canada federal prosecutors conduct proceedings related to drug offences. However, in Quebec and New Brunswick drug cases investigated by local or provincial police are handled by provincial prosecutors. The new legislation will provide that where the prosecution of the offences commences at the instance of a government of a province or conducted by or on behalf of that province, any forfeited property will be disposed of as the attorney general of that province directs and not by a minister of the federal government as is currently the case.

I believe that this will be a very effective instrument in our fight against organized crime. We will be finishing off the proceeds of crime legislation that we have already passed and completing the task which will enable us to really put pressure on organized crime in their pocket-books. That will reduce their ability to continue in an activity that is of absolutely no benefit to Canada whatsoever.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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LIB

Russell Gregoire MacLellan

Liberal

Mr. Russell MacLellan (Cape Breton-The Sydneys):

Madam Speaker, I thank the Solicitor General for his remarks. This bill before the House today is well overdue. There have been a lot of shortcomings in the present legislation as the Solicitor General has mentioned. This bill goes a long way to correcting these shortcomings.

We have to look at this bill in committee. There are some questions which have to be examined. Nevertheless if the government is willing, we can move this bill along quite expeditiously.

While we can give careful study and due examination and allow the interested groups to make their comments, if the government is serious about this bill we can have it

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passed by the time the House adjourns. I am hoping that is the case because as I said initially this legislation is well overdue.

The bill establishes a federal program to share forfeited proceeds of crime with other jurisdictions. These are the jurisdictions that are also involved in drag and other criminal prosecutions. It would include foreign governments as well. This would be in cases where the crime is international in nature and the police forces involved have been Canadian as well as from other countries. The question is: How are these funds to be shared? I think the Solicitor General said that a lot of this is still under review.

It is important that we get at least the basic parameters of how these funds are to be shared set down so that when we pass the bill and in the discussion of the bill we are able to give this very important aspect some definition to the people of Canada, particularly the police forces of Canada.

The individual police forces would not receive the money under this legislation but rather the municipal and/or provincial governments which fund the department would be the recipients.

I was encouraged by one thing the Solicitor General said. He stated that money would not just be given to the provinces and the provinces allowed to pass it on to the municipalities. I think that is absolutely necessary and is a very good point. We have to be sure that the municipal police forces receive an appropriate share of the proceeds of crime. I would be interested in more definition of how this is to be done, but I welcome the Solicitor General's unsolicited remarks in that regard.

Also, this bill will establish an office in the Department of Supply and Services to manage seized and restrained assets which have been seized in federal crime cases. Cases prosecuted by the provincial attorneys general are not covered by this legislation.

Special allowances, as the Solicitor General has said, will be made for Quebec and New Brunswick. Where the attorney general of a particular province has instigated the action, then the attorney general will have the say over how the assets are to be disposed of.

It is also important, as the Solicitor General has said, that those managing the assets be the proper people. He is aware that the RCMP cannot run ski hills very well. No reflection on the RCMP, but I think that goes without saying. There will be an advisory capacity for the minister's office and probably the Department of Justice, which I think is important.

Canada has had proceeds of crime legislation since 1989 but all the moneys and assets collected reverted to the federal government. This has been seen as unfair to the provincial and municipal governments which assisted in solving these cases, many of which were under investigation for long periods of time and which were very costly to local and provincial police departments.

What we are doing in this bill is equitably giving financial assistance to these police departments. I think the Solicitor General agrees that these departments are entitled to this because they have played integral roles in solving these very important cases.

In the past, problems have arisen with respect to the cost of managing seized and restrained assets and the Solicitor General has alluded to those. As I mentioned, there have been situations where the RCMP has found itself running pizza parlours, hotels and ski resorts. Needless to say this is problematic and they have to be addressed.

The idea of trustees in bankruptcy is a good one. It means there are going to be a lot of trustees in bankruptcy moving to coastal communities if the drug trade continues the way it has. Fine, that is free enterprise.

It is true we have not taken the initiative in obtaining and seizing these assets of crime that perhaps we should have. This bill is going to give the incentive to do that.

Where municipal and provincial police forces feel they are going to be making money for the federal coffers, they do not have the initiative to go that extra step, do that extra amount of footwork and the long and boring surveillance work that needs to be done to solve these cases. Now they have more initiative. There will be initiatives by the forces and their respective provincial and municipal governments. The assets must be managed, as we have said.

May 7, 1993

There is one thing I did not hear the Solicitor General mention and that is recommendation three of the report on crime prevention in Canada by the Standing Committee on Justice and Solicitor General where the committee recommends: "that a share of the moneys forfeited as proceeds of crime be allocated to crime prevention activities and that the federal government allocate 1 per cent a year of the current federal budget for police, courts and corrections to crime prevention over a five-year period. At the end of five years Canada should spend 5 per cent of the current federal criminal justice budget on crime prevention".

Maybe the federal government intends to do it through the federal budget. However it is important, even though we are giving the money to the municipal and provincial governments, that it go back into police work. There are financial constraints today. The problem is that we do not want our criminal justice system to suffer as a result of these financial restraints when we are seizing property that is the proceed of crime. That funding should go back into our criminal justice system, to the police departments for crime prevention. I think more attention should be given to this by governments.

There has to be a concerted effort not only by the federal government but by provincial and municipal governments for a meaningful thrust toward crime prevention in Canada. The whole idea of the sharing of the proceeds of crime is a good one.

The Liberal Party has been supportive of this for some time. We recommend that the proceeds of any crime operation be split among all the parties involved in a case, the percentage of which would depend on each party's level of involvement in the particular case. For us, and I am sure for others as well, this is a basic means of sharing.

Since 1989, $60 million in assets have been seized through the current proceeds of crime legislation. It is imperative that the government work more closely with law enforcement agencies in the provinces and the municipalities to find ways of making this legislation work. The Solicitor General referred to that, and rightly so. With this legislation this may happen automatically because there will be more incentive for these police agencies to work to solve these crimes if there is going to

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be some return for their police work in their respective jurisdictions.

However it is not all going to happen automatically. More of the crimes can be solved and more of these assets can be distributed through dialogue among the police forces and perhaps some liaison work done among the police forces to ensure that everything is being integrated, everything is being shared and there is a co-operative and good attitude toward a full assault against crime and the proceeds of crime.

I do not exactly know on what basis we are considering the sharing with foreign countries. I do think that is a fair proposal. If we are going to work with other countries, the incentive for police forces in other countries has to be the same as we have for police forces in our provinces and municipalities. The only thing I would say is that we should have some parameters on an international basis for how we share them. I think it should be reciprocal. I do not think, if we have a situation where another country does not share funds with Canada, we should through largesse share funds with them. Perhaps there can be international understandings with other countries and I think it is in the interest of other countries.

There can be a formula agreed to. It does not have to be a rigid formula, but basically a formula on cost sharing of the proceeds of crime. This would be welcomed. It would certainly be welcomed by the people of Canada. As has been alluded to by the Solicitor General, crime and particularly the drug trade is very much an international business. It is through international co-operation that we will make the biggest impact on solving these crimes.

We want assurances, from the Minister of Justice in particular, that the proceeds of crime will indeed find their way back to local and provincial police departments. We want assurances that this will be done but, as I said earlier, we need some parameters and some regulations on the matter. I know the Solicitor General feels the same way and he will be working to this end.

We want to be certain that provincial and municipal governments will not keep the money to build new roads and pay down their deficits. We want to be certain that their police forces, their crime prevention and criminal justice activities will benefit and that the criminal justice

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system will benefit. It is very important that justice on a municipal and provincial basis will benefit from the proceeds going back to the municipal and provincial governments.

Police departments are already suffering from severe fiscal restraint. They need these funds to keep up their wars against crime, particularly the war against drugs. It is so insidious today that we need every tool to fight this war on drugs. We cannot at the same time let down our guard on the rights of citizens, on our principles of law and our principles under the Charter of Rights and Freedoms. We must, in ways that do not infringe on the rights of our citizens, do everything we possibly can to gain an upper hand in this war against drugs.

With respect to the new office to which I referred in the Department of Supply and Services, we want assurances that it will not evolve into a bureaucratic nightmare, making it very difficult for local and provincial governments to have access to the money from the seized assets the office will be managing. We need more clarification from the government of the exact function or role of this office. I hope this will be forthcoming. It will not be a difficult procedure, but maybe it will take a little time to circulate some regulations, a discussion paper or just an information sheet. It would go a long way toward not only informing but also promoting the program the government wants to foster.

We would like to know who will be paying for the operation of the office. Will its expenses be covered by the money and assets it is managing and sharing with the other levels of government? Is that how it is to be paid for, or is it to be paid for via the estimates in estimate costs? Will all three levels of government have a share in its operating costs? That is the question. The Solicitor General shakes his head indicating that they will not. That answers that question. Flow will an office, presumably located in Ottawa, manage assets seized in Vancouver or Halifax?

The Solicitor General has talked about trustees in bankruptcy, which is important. The network of liaising with trustees in bankruptcy is also important. I agree we should not be sending public servants to Vancouver or Halifax to manage the proceeds of crime from a drug bust, for instance. However there should be some idea of how the network of control and management is to be developed.

All the questions we want answered by the government are really questions of procedure. Nevertheless they are important as this process and legislation evolve. I also want to mention a couple of points to the Solicitor General who is very kindly sitting through my speech, as painful as it may be. They relate to the services presently being provided.

I will just use the RCMP as an example, but not as a scapegoat or because I feel it is going to happen. There has been a great deal of concern in Nova Scotia and certain other parts of the country that the RCMP will place its laboratories on a cost recovery basis as a means of cutting federal government expenses.

I do not want that to happen because funding is to go back to the RCMP. I do not want the government to undercut present funding for our police forces at the same time as they get the proceeds of crime. It is not only a question of taking funding away if cost recovery of the laboratories of the RCMP is demanded. It gets to be a problem of law enforcement in Canada.

Provincial and municipal police forces now have access to the RCMP laboratories. In order to save funds perhaps they will start using laboratories in the United States that may not cost as much or may provide the services at a lower rate, but they will not give the results we have been used to getting from the RCMP laboratories. We will get a lower standard of laboratory services for our police forces. Therefore we will have a reluctance to utilize the laboratory services. We will have a problem verifying a lot of what we want to verify in our fight against crime. I would ask for that not to be the case.

I would also suggest to the Solicitor General that if we are to make a meaningful assault on crime, particularly the drug trade, we have to examine some items that have already been cut. As an example I would use coastal surveillance boats in Atlantic Canada. The RCMP has operated in Nova Scotia three small boats along the coastline. It has managed to speak to fishermen and residents of the coastal communities in Nova Scotia, thereby getting a good deal of information that has led to drug seizures, to convictions and ultimately to the seizure of assets and proceeds of crime.

These boats do not operate now. The RCMP will say that they do, but actually the boats are there and no one is assigned to them. For a boat to be put in the water a complaint has to be received from a person first. The boat is brought on a trailer down to the water, launched and taken to the area of concern. The persons investigated could be in Panama by the time the RCMP coastal

May 7, 1993

cruiser gets to that particular spot. That is not the answer.

Also, the dialogue with the communities must be done by RCMP officers while they are doing their other functions, such as traffic control or whatever else they are doing. I think that that is not fair. The result is that if it is optional work, in most cases the RCMP officers do not have the time to do it. They are not doing it because they have other concerns. If they do not look after the job they were assigned to do and if that job is not done then they will be criticized and perhaps reported. They have to do the job they were assigned to do first, even though they may feel that something of an optional nature may be more important in the long run.

I would like to see RCMP officers assigned back on coastal surveillance and have these boats staffed by men and women of the RCMP on a regular basis as was the case before so that we can have this information flowing back the way it once was.

I want to just finish by saying that I think this bill is a major step forward. I think I have stated the questions I have and that our party has regarding this legislation. I think that with information at committee stage we should be able to answer some of these questions and I welcome that.

We are going to be recommending certainly the passage of this legislation on second reading and the opportunity to examine it, not exhaustively, not without reason, and certainly not to delay the bill in committee stage, but to get some feedback by groups that we think can provide information.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Nelson Andrew Riis (N.D.P. House Leader)

New Democratic Party

Mr. Nelson A. Riis (Kamloops):

Madam Speaker, first of all I would like to say that we are happy that the Solicitor General has brought this legislation forward. To my recollection this is the third piece of legislation in this law enforcement family that will enable law enforcement officers and others to have a little better chance of fighting and combating crime in the country, particularly when it comes to dealing with drug dealers and those people who participate in that business.

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I also would like to say to my hon. friend who just spoke that I appreciated his remarks as an indication of support for this general initiative taken by the government. I want to say on behalf of my party that we support this initiative. It is a little late but that is the way the world is sometimes. We appreciate the Solicitor General's work on this. I understand that it was the Solicitor General's recommendation that when we proceed to the next stage of this legislation it will go to the Standing Committee on Justice and Solicitor General. It seems to me that that would be a good idea and would facilitate its passage because the people there have done all the necessary preliminary work in the reports that they recently made public.

I must say that the publication Crime Prevention in Canada: Toward a National Strategy, which is the 12th report of the Standing Committee on Justice and Solicitor General may turn into a best seller in the country. People have been anxious to get copies of this because it is a very comprehensive study of the problems associated with crime prevention and more important, it lays out a whole number of recommendations that people on balance find very progressive and very useful.

Today we are moving in that direction. There is a little work to do on this legislation and I will get to that in a moment. However, I want to say to the Solicitor General that we would be prepared to see this referred to the Standing Committee on Justice and Solicitor General to ensure that its passage is completed in a most expeditious way and to ensure that it becomes law before summer. I want to say again that the Department of Justice says that the bill is aimed at promoting co-operation among all levels of law enforcement, especially when dealing with drug trafficking and smuggling.

I remember a day last August when a van from the province of British Columbia was stopped in Winnipeg. In the van 244 kilograms of high quality marijuana were found. Obviously it was confiscated. The people involved, the RCMP and the officers from the local force who, if my memory serves me, were part of a new integrated intelligence enforcement unit that was created, really did some excellent work and need to be congratulated.

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This is an example of the kind of effort that we can achieve when there are different levels of law enforcement and different groups of people working to combat the spread of the drug trade. They combine their efforts, talents and energies and come up with these kinds of seizures and arrests.

Let us face it, we are just seeing the tip of the iceberg in this whole process. When we start looking at the extent of drug trafficking in this country, the amount of drug abuse and the amount of smuggling that takes place, particularly on the two coasts of Canada to say nothing about crossing over the land border with the United States and Alaska, we have really just begun to fight this incredible and sinister aspect of our society.

Two weeks ago I had a chance to meet with a number of people who are involved with drug enforcement in my community and representatives of agencies that deal with people who suffer from drug abuse and in their own way attempt to combat the importation and sale of drugs. They are almost at a point where they are throwing their hands up. The court system does not seem to be designed to handle it. There is an overwhelming demand on the time of present law enforcement officers. They can only seem to react to the most serious initiatives. There is a real level of frustration.

I want to say to my friend the Solicitor General that I think everyone will find this initiative to be not only a welcome one but very helpful. We appreciate this initiative.

I want to say that the bill will establish a federal program to share forfeited proceeds of crime with other jurisdictions involved in federal drug and other criminal prosecutions.

I think the Solicitor General made some important remarks in his speech today. I read from the list that goes back into August of this year some comments by the inspector of vice in the Winnipeg police force. He was delighted when he heard about this initiative because he felt this would assist them in their budgeting and provide funds for the police force.

As my friend has said, this is not quite the case. He went on record to say that the proceeds of crime will be divided up to reflect the amount of participation of the

various levels presumably in the undercover work, investigations and the actions leading to arrest.

As he said, if it is one-third federal, one-third provincial and one-third municipal then that is the way the sharing would be. I think he would admit that is not in the legislation now and that is one thing we can presumably do by regulation and so on. I think we all find his remarks comforting in that respect but I will have something more to say about that in a moment.

I also want to say that the bill will establish an office within the Department of Supply and Services in order to manage the seize and restraint assets that are subject to forfeiture in the proceeds of crime in these cases that are prosecuted by the Attorney General of Canada. That is helpful to know.

To reflect some of the comments made by my colleague from the Liberal Party who spoke, we will have to ask how this office will be set up and who will support it. Will it be from the proceeds that will be collected? Will it be from just regular federal government operations? Will it be on a cost-sharing basis? This is something that is rather minor in this whole initiative and something that hopefully we can work out either again through regulation or while we are in committee dealing with this issue.

Let me go back and say that when the government introduced the proceeds of crime legislation that came into effect back in 1989, we in the New Democratic Party greeted it with some enthusiasm. It was a major step forward and a very important step.

At that time our justice critic, the member for Burnaby-Kingsway, had this to say when we discussed it at second reading: "I am pleased to rise to debate this important legislation that will ensure that Canada finally takes the long overdue step to recognize that those who profit from organized crime in many cases are able to use weak and inadequate legislation as a means of laundering the profits of crime. We in this party certainly support effective legislation that will deal with the proceeds of organized crime".

While praising the principle of that legislation, which in effect gives police and the courts the ability to confiscate the profits of crime, we raised examples of how the legislation would not be improved by this and we suggested a number of improvements.

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Most significant was the concern that the legislation did not encompass banking and financial institutions. I remember that I raised that point myself at that time and said that as long as the banks and financial institutions are not involved to stop the laundering of drug money, it is going to be almost impossible because there is where their main problem exists. We have all sorts of stories about how banks and financial institutions that are unscrupulous have been involved in drug money laundering of one kind or another.

At that time the Canadian law enforcement agencies were not allowed to access information about bank accounts suspected to be conduits for laundering schemes, unlike the United States where financial institutions were required to report their deposits over certain amounts on a regular basis. I suggested that for Canada this legislation be amended. It certainly would have had our support at least.

Unfortunately that change was not made until Bill C-9 that was passed in the House of Commons in June 1991. I wish that our voices had been heard a little earlier but we are proud of the role that we played in the eventual passing of that legislation that resulted in banks and financial institutions being involved in helping law enforcement agencies identify money laundering particularly associated with the drug trade.

We also brought forward some other concerns. What is now section 462.47 provides for the disclosure of tax information in cases involving offences in relation to drugs. It does not allow for similar disclosure for some other enterprise crimes which were established by the legislation. This is something that we have yet to act upon and perhaps we should act now very quickly.

I also want to say that what is now section 462.3 defines enteqrrise crime and unlike other jurisdictions, including Australia, Britain and the United States, includes proceeds from bawdy houses. Certainly no one would disagree that those who exploit the sex trade workers and acquire property and other proceeds as a result should get away with it.

However, there was compelling evidence from the Fraser commission that was responsible for one of the most in-depth studies of prostitution in our country to

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show that this inclusion would drive prostitutes into organized crime.

Again, I want to point it out to my hon. friend, the Solicitor General of Canada. Whether the Fraser commission was correct or not will become clear in the upcoming years as police forces widen the net on money laundering.

Here in Ottawa and in other cities the police are using the proceeds of crime provisions to go after criminals involved in prostitution. Pimps are using shell companies to channel credit card payments from johns who frequent escort services. We have seen some interesting examples of that here in our own city of Ottawa lately.

Exercising control over another person to commit prostitution and living off the profits of prostitution are serious crimes and I am satisfied to know that this new law is being used in this way in terms of combating that.

We will have to watch carefully to see if we have not inadvertently caused prostitution to become enmeshed in organized crime. That is something we will deal with if that becomes obvious.

I want to ask a rhetorical question: How much money are we talking about here? It is interesting and rather disturbing when we speculate on just how much property is involved and how much money flows through money laundering schemes that are involved in large-scale drug smuggling and trafficking operations in Canada.

Between 1989 and 1992 over $60 million was seized. We would all recognize that this is simply the tip of the iceberg as well. We are probably talking about literally hundreds of millions if not some billions of dollars. Surely after it came into effect the new law that was used successfully in a big Canada-U.S. investigation was helpful in uncovering a $1.2 billion scheme that moved money from banks in Panama and the United States through Toronto and Switzerland.

I might say that a recent United Nations survey set the total dollar value of the illegal drug trade world-wide as second only to the amount spent on the international arms trade which we all know to be astronomical. The changes in the law regarding bank recording will be even more helpful. As was said previously, we are proud of the role we have played in seeing those provisions implemented.

May 7, 1993

What are our concerns about this particular bill? Madam Speaker, I notice you are getting restless so we must move on to Question Period. I look forward to continuing my remarks after Question Period.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink
PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

I am sorry if I looked restless but I just meant to allow hon. members to have the time they expect to have to make their comments.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Douglas Grinslade Lewis (Solicitor General of Canada)

Progressive Conservative

Mr. Lewis:

Madam Speaker, on a point of order. I appreciate my hon. friend will continue his remarks after Question Period. I believe there have been discussions among the parties and I think you will find consent for the following motion:

That the motion for second reading of Bill C-123 be amended by

having the bill referred to the Standing Committee on Justice rather

than a legislative committee in the Departmental envelope.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

Is there unanimous consent to adopt the motion?

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink
?

Some hon. members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink

Motion agreed to.


PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

It being eleven o'clock, the House will now proceed to statements by members pursuant to Standing Order 31.

Topic:   GOVERNMENT ORDERS
Subtopic:   SEIZED PROPERTY MANAGEMENT ACT
Sub-subtopic:   MEASURE TO ENACT
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STATEMENTS PURSUANT TO S. O. 31

PC

Ken Monteith

Progressive Conservative

Mr. Ken Monteith (Elgin -Norfolk):

Madam Speaker, we are nearing the end of National Forest Week. This year the chosen theme was Our Common Ground. This theme underlines the fact that our vast forest resources affect each and every one of us and that we all have a role to play in safeguarding their long-term health and productivity.

Over a year ago Canadians from all walks of society ratified anew national forest strategy. Canada is the first forest nation in the world to achieve such a unified

national commitment to environmentally sound sustainable development of our forests.

This achievement is promising evidence that Canadian governments, industry, labour and environmental interests are indeed finding common ground and are working together to ensure that our forests provide the same opportunities for future generations as they are providing for us in the present.

Canadians are very conscious of the importance of maintaining our world leadership role in forest science, technology and international exchanges. As stewards of 10 per cent of the world's forests we have both the opportunity and obligation to share our knowledge and our experience with the global community.

In view of-

Topic:   GOVERNMENT ORDERS
Subtopic:   STATEMENTS PURSUANT TO S. O. 31
Sub-subtopic:   NATIONAL FOREST WEEK
Permalink
PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

I am sorry but the hon. member's time is up.

Topic:   GOVERNMENT ORDERS
Subtopic:   STATEMENTS PURSUANT TO S. O. 31
Sub-subtopic:   NATIONAL FOREST WEEK
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VIETNAM

LIB

Beryl Gaffney

Liberal

Mrs. Beryl Gaffney (Nepean):

Madam Speaker, in Vietnam thousands of human rights activists and religious leaders are either imprisoned or under house arrest for demanding the right to speak for democracy and to freely practice their religion. Torture and solitary confinement appear to be the Hanoi regime's only answers to these calls of conscience.

The plight of Nobel Peace Prize nominee Dr. Nguyen Dan Que is typical. He was imprisoned in 1978, tortured, beaten and chained in solitary confinement. Human rights groups secured his release after 10 years in prison only to see him back in jail again and sentenced to 20 years of hard labour and he remains there.

The Canadian government must use every opportunity to speak out against the repressive regime in Vietnam. We must state clearly the Canadian commitment to human rights and its linkage to Canadian trade policy.

Although there are opportunities for improving relations between Canada and Vietnam they will not reach their full potential until we are satisfied that the rights of the Vietnamese people are respected.

May 7, 1993

Topic:   GOVERNMENT ORDERS
Subtopic:   VIETNAM
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SOFTWOOD LUMBER

PC

Guy St-Julien

Progressive Conservative

Mr. Guy Saint-Julien (Abibiti):

Madam Speaker, Canada has won a major round. A binational trade panel asked to rule on the softwood lumber dispute between Canada and the United States ordered the U.S. Commerce Department to do its homework and gave it 90 days to reconsider its decision to impose a 6.5 per cent countervail duty on Canadian softwood lumber.

Mr. Rivard of the Canadian Lumbermen's Association said this was a victory but that much remained to be done.

Mr. Lacasse of the Manufacturers Association of Quebec was disappointed because, although the panel of experts had acknowledged certain points made by Quebec, it ruled that the Department of Commerce was free to decide whether it wanted to impose a uniform national rate or rates that would vary according to province,

The countervail duty is the same for all provinces. However, this national averaging camouflages some major disparities. Even according to U.S. assessments, Quebec's subsidy is so minor it does not justify the imposition of countervail.

Topic:   GOVERNMENT ORDERS
Subtopic:   SOFTWOOD LUMBER
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FREE TRADE

May 7, 1993