44th Parl. 1st Sess.
June 19, 2023 11:00AM
- Jun/19/23 12:57:50 p.m.
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Mr. Speaker, I certainly share the frustration that many Canadians and many parliamentarians on both sides of the aisle share for the horrible delay tactics being used on the other side and the inflation of every single point becoming the end of the world.
This is a critical bill. It would help us in the fight against money laundering. It would help us in the fight against corruption. As the hon. member mentioned, it even helps us in the fight against Russian oligarchs. It would create a register that shows beneficial ownership, which is who is really behind the ownership structure of a company, such that we can then move forward, if necessary, to use that data, whether it is for the fight against money laundering, terrorism or anything else when the corporate structure is being used as a sham.
It would also allow us to protect whistle-blowers, who expose these kinds of measures. The legislation would basically create a best-in-class structure to mimic the best practices in other countries. It aligns with the best practices at the international level and with emerging best practices at the Canadian level, such as that in Quebec I mentioned a moment ago. We would be able to co-operate more easily with the provinces by creating this register, which would give access to law enforcement agencies and other agencies while still protecting the privacy of Canadians.
It is a good thing moving forward. There is widespread agreement and critical acclaim for this bill. We should just be getting it done.
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Madam Speaker, I am rising today to speak to Bill C-42, which is the government's proposal for a beneficial ownership registry.
I would like to critique this registry, because this is an incredibly important issue. The fact of the matter is that Canada has become a haven for global money laundering. In fact, do not take it from me. Here is just some international reporting on Canada. In the New York Times, just a few months ago, on March 25, an article written by Ian Austen, the Times journalist who covers Canada, begins with the sentence, “Canada is such an attractive place for money laundering that there’s even a special name to describe the activity here: ‘snow washing’.”
The U.S. State Department, in 2019, designated Canada as a “major money laundering country”. In fact, I pulled up the State Department's report from March 2022, titled “International Narcotics Control Strategy Report”, volume 2. The report says, under “Canada”, that it is estimated that between “$36 billion [and] $91 billion is laundered annually in Canada”. Assuming those are U.S. dollars, that represents, roughly, between $50 billion and $120 billion a year that is laundered through this country. One hundred and twenty billion dollars a year is roughly 5% of our GDP. Five per cent of our GDP consists of money laundering.
That March 2022 report says, “Noted deficiencies include limited oversight of the domestic non-profit sector, gaps in [customer due diligence] responsibilities for [designated non-financial businesses and professions], and a lack of beneficial ownership transparency for trusts and similar legal mechanisms.” Therefore, not only has our status as a money-laundering haven and, by consequence, a sanctions-avoiding haven and a proceeds-of-international-crime haven become documented in The New York Times; it has also been noticed by the State Department.
It is not just internationally that it has been documented. In the province of British Columbia, there was a huge commission of inquiry into money laundering. Its final report was published in June 2022 by the Honourable Austin Cullen, who was the commissioner. The commission found that billions of dollars were being laundered through British Columbia companies, British Columbia real estate and British Columbia trusts, and that this was having a deleterious impact on people living in British Columbia. This report came out just last year, highlighting the problems with money laundering in just one province, which represents roughly 10% of Canada's population. It is clear that we have a problem with money laundering and that, by consequence, we also have a problem with becoming a destination for the proceeds of sanctions evasion and a destination for the proceeds of international criminal activity. The government introduced this legislation, in part, to try to respond to these very real concerns, but the problem with the legislation in front of us is that it is deeply flawed.
I asked the Library of Parliament to do some research on the number of federally incorporated entities in Canada. The information it provided for me was that, for the year 2020, the most recent year for which data have been provided, the number of CBCA corporations, federally incorporated entities, is 421,301. The problem is that there are some 4.3 million businesses in Canada, of which only roughly 10% are CBCA corporations.
Ninety per cent of businesses in Canada are incorporated under 10 different provincial statutes, of the ten different provinces, and these corporations and trusts would not be included in Bill C-42's beneficial ownership registry. The Liberal government would say that it is working with the provinces to encourage them to create a beneficial ownership registry. The problem is that one province, Alberta, has not made any moves to create one. The problem with the other provinces is that their beneficial ownership registries have major loopholes in them. The only beneficial ownership registry in the country that is worth the paper it is written on is that of the province of British Columbia. That proposed registry includes provincially incorporated entities, trusts and real estate; it is capturing all of that in its registry. As a result, that provincial registry, combined with the federal one, would include all companies in the province of British Columbia. The problem for the other nine provinces is that they are not including real estate, which the Cullen commission in British Columbia identified as a major asset through which money, international money in particular, is being laundered.
The registry in front of us would only be as good as the weakest link in the entire system, and at least eight of the 10 provinces are not including real estate in their beneficial ownership registry. As a result, people overseas trying to avoid sanctions enforcement and trying to launder the illicit proceeds of crime and terrorism would be able to use Canadian real estate in eight out of 10 provinces to continue to launder their money, just like the Cullen commission identified in the province of British Columbia. Those individuals overseas and outside of Canada who want to avoid sanctions or want to launder the illicit proceeds of their crimes or terrorism could do so through provinces where a beneficial ownership registry for provincially incorporated entities has yet to be proposed. It is clear that the proposed beneficial ownership registry that the government has put in front of us today would not solve the problem of Canada's status as a destination for snow washing, a destination for international money laundering.
What the government should have done is to have used the broad and deep criminal powers accorded to it in the Constitution, which courts in this country, through various rulings, have long upheld as being broad and deep, to create a national beneficial ownership registry that would have included all companies in Canada, whether they are incorporated under the Canada Business Corporations Act or whether they are incorporated under one of 10 provincial statutes. It should have included all trusts in Canada, whether they were incorporated federally or provincially, and it should have included the beneficial owners of all real estate, real property in Canada, in order to ensure that we start cracking down on those who would use our country as a haven for money laundering for the proceeds of terrorism or for the proceeds of crime. The Liberal government did not proceed down that path, so, once again, we would have implementation of a good idea from the government in a very flawed manner, as it has been with so many things that the government has made announcements about.
I will finish here. The beneficial ownership registry in front of the House today would not plug the hole that has allowed this country to become such a haven and such a destination country for sanctions evasion for the proceeds of crime, for the proceeds of terrorism and for money laundering in general that landed us, in March, on the front page of the New York Times, and in the State Department's assessment of global havens for money laundering.
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- Jun/19/23 6:45:18 p.m.
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Madam Speaker, I would encourage the member to go back a little further in terms of Canada's involvement in money laundering. Donald Fleming, a former Conservative finance minister, was instrumental in setting up the Cayman Islands as an international tax haven, and he set up many others, in the Bahamas and elsewhere. Therefore, it is not a coincidence that Canada is known for money laundering, because Canada helped set up some of the financial centres of the world where money laundering takes place, and, through various taxation treaties to avoid so-called double taxes, made it possible for money to move very easily between Canada and these other jurisdictions. That is why we lose tens of billions of dollars in tax revenue from legitimate sources of income, in addition to the damage that is done in Canada through money laundering.
I wonder if the member perhaps has some reflections on the way that a certain kind of anti-tax rhetoric has been used over decades now to position Canada as a world leader in money laundering.
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- Jun/19/23 6:46:20 p.m.
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Madam Speaker, the member's question allows me to highlight that there is a distinction between tax havens, like the Cayman Islands, which was mentioned, and money laundering. The whole purpose of money laundering is separate and distinct from that of tax havens. The purpose of money laundering is to hide the provenance of the money, and, in particular, to hide the fact that the money was produced illicitly through criminal activity, terrorism or sanctions evasion.
With the plethora of sanctions that have been announced by the government and other governments in the last year because of the Russian invasion of Ukraine, it becomes even more important to enforce sanctions, and it starts with having a proper beneficial ownership registry, which this one is not. I am pointing out the holes in this registry so that when we come back in another Parliament, the holes can be fixed and plugged so we can start cracking down on money laundering in this country.
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- Jun/19/23 7:00:25 p.m.
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Madam Speaker, it is always a pleasure to rise on behalf of the people of Kamloops—Thompson—Cariboo.
My colleague spoke with a great deal of knowledge on this point. I can see he represents his constituents well for a relatively young MP, compared with people in mid-life like me; I am at the tender age of almost 45 now. I said I was 44 the other day, and I heard about it.
Money laundering has had both a pervasive and a significant impact. I will ask my colleague this: Could he comment on how his riding of Battle River—Crowfoot has perhaps been, maybe not directly impacted, but impacted generally by these types of things?
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- Jun/19/23 7:01:14 p.m.
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Madam Speaker, I appreciated being called “young” in this place, although with the rate my hair is turning grey, I am not sure if that is more the job or my age.
I can highlight how this would specifically impact my constituents, although this would not be unique in the context of this discussion. Most people do not understand the intricacies of major business operations, how a corporate registry would affect them, how that would affect the accounting of major multinationals or what reporting requirements banks have.
For example, if the average Canadian were asked on the street what FINTRAC is, most people would probably not know. However, this all has to do with Canadians having confidence in our economy to be able to purchase anything, to go into a bank and trust the fact that the institution is going to have security on its deposits and to ensure that our law enforcement is able not only to pull somebody over for speeding but also make sure that there are consequences for serious crimes, such as laundering money from the proceeds of crime.
This comes back to the very basic principle of ensuring that there is trust in our institutions.
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- Jun/19/23 7:03:45 p.m.
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Madam Speaker, there is a lot to address. I will try to get to all three points.
We need to strengthen whistle-blower protections in this country. That is absolutely essential to ensure that those who are taking risks, whether they are professional risks, risks to the possibility of advancement or sometimes even further risks than that, have those protections. Certainly, I have talked at length about that at the ethics committee here in Parliament.
When it comes to transparency and the need for it, this is absolutely and fundamentally important. That comes back to my response to the previous question. Most Canadians may not understand the intricacies associated with multinational business operations and why money laundering may affect them, but when it comes to trust in our institutions, every Canadian feels that. Unfortunately, we have seen an erosion of trust in the institutions that we all count on.
When it comes to job losses in the member's constituency, I hear his concerns. When the Keystone XL pipeline was cancelled by President Biden, and the Prime Minister refused to do anything about it, I had to face 2,000 constituents who got pink slips. They lost their jobs because of the inaction and political indifference of a party that has wanted to shut down the largest economic driver in our country. I hear that member and the pain associated with so many individuals who face the personal crisis of a job loss, especially when it is a surprise. We need to do more in this country to ensure that we create a business environment that allows for prosperity.
Certainly, the member for Carleton has talked about everything that we have been talking about. We are working diligently to ensure that we can be a country that fosters prosperity again. Together we can do that and bring it home.
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Madam Speaker, it is a pleasure to rise to speak about Bill C-42 today. It is an honour for me not only because I am speaking on behalf of the good people of Central Okanagan—Similkameen—Nicola but also because it also gives me a chance to recall some of my work as a member of the finance committee in 2017, where we did an extensive review of the money-laundering regime in Canada as it relates to not only money laundering but also to the financing of terrorism.
Let me give a quick shout-out to the former chair of that finance committee, the Hon. Wayne Easter, who basically said that we should travel to places like London and Washington as part of it. I was a member of Parliament who was quite skeptical of junkets in all their forms, but he told me that he thought it was important for the committee to do that, and some of the best testimony we received as a committee on how Canada is seen in the world with respect to things like money laundering was absolutely correct. I have to thank the Hon. Wayne Easter for those observations, because it really showed that Canada is an outlier, and for all the wrong reasons.
We have seen Transparency International talk year after year about how we are slowly becoming a country where money laundering has become a problem. We were once very respected under the Transparency International regime.
Those 2017 recommendations from the committee still stand. It was an all-party report. The Liberals, Conservatives, Bloc members and New Democrats participated in the report and came to many unanimous recommendations, partly as a result of those trips and experiences, because we saw very clearly that Canada had a lot to achieve.
Coming back to Bill C-42, there are a number of things missing from this legislation. For example, recommendation 10 from the 2017 report refers to a rule in the United States.
It states:
That the Government of Canada make it a criminal offence for an entity or individual to structure transactions in a manner designated to avoid reporting requirements. These provisions would be modelled on Title 31 of U.S. code section 5324.
What that means is that while this will capture some of the significant control of a particular corporation's holdings so that someone would be able to find out who had significant control of an asset, such as a piece of real estate, it operates only after the fact. Only then can law enforcement start to draw evidence together to link a particular group, such as organized crime or a terrorism group, with a group of accountants or business owners and lawyers, and through that web be able to trace exactly who is connected to whom and be able to start pulling on those threads.
The Americans have taken a much more proactive approach by making it a crime to help someone to structure their affairs to avoid transparency. This is quite important. While there are many measures in the Criminal Code, it is important that we look at Canada. One of the outcomes of the report is that the legal community is still not within the FINTRAC regime. While we have seen an expansion in recent years, I think partly because of our report regarding FINTRAC, we still do not see everything included, such as lawyers.
Members may ask why that is important. It is because they are the very professionals who structure those affairs so that the money can be laundered in Canada, so I think it is an area still worthy of investigation.
Let us go to the beneficial ownership registry itself. When we went to the United Kingdom, one of the things that struck me there is that it has this beneficial ownership registry online. It is free, and there is very limited information.
First of all, I do not think most Canadians will go to a beneficial ownership registry. There is always a temptation to see what one's neighbour owns and, of course, there could be some abuses that way, but essentially, the people who would be looking at this are law enforcement and Canada Revenue Agency employees working on files that are related to the matter of money laundering. It is absolutely critical that those law enforcement officials, people who are lawfully accessing it for investigate purposes, be able to do so quickly.
However, this registry would only carry just a sliver. Again, for the people at home saying that a beneficial registry sounds good to them, it would only be for those corporations that are registered under the Canada Business Corporations Act. As someone who has lived in British Columbia my whole life, I will say that, from speaking to many lawyers, I know that the bulk of solicitors' work is when they are processing real estate and updating the registry of which a company is kept, and most of that action happens provincially.
As my colleague from Wellington—Halton Hills recently said, this particular measure might offer some good points, but it is only as strong as the weakest link. If we have 10 different registries, we may end up in the tyranny of small differences.
We could take health care as an example. Not all health care information is delivered to the Public Health Agency of Canada in a uniform manner. We find that fax machines are still being used. If one province only gives information under certain forms, it is then very difficult to aggregate that to get a whole picture.
The government, just as it has done in previous agreements with provinces, comes to an agreement on principle, but when it comes time to do the work, unfortunately it does not seem to have a true consensus. I will just harken back to the Canada free trade agreement, which apparently all parties sided with. Half of it was exemptions. One may agree in principle with something, but when it comes to the operability of what comes out of something, it seems that the government is only looking for the big announcement. In this case, it is a beneficial ownership registry that would be transparent.
Again, if it is only a sliver of the activity and it does not necessarily create a uniformity of interoperable registries where everyone can funnel the same information and have aggregated information that is the same, meaning that it is always going have the same basics available, one is going to have that tyranny of small differences. When someone is looking for that information, the last thing we want to do is end up where we do not supply the information to law enforcement in a straight, one-stop shop.
I should also point out that in the U.K., the so-called transparency model has some caveats. When I was at committee, I asked officials about this, and they did say that for persons under 18, their information would not be shared, which probably is for the best, although I would ask how someone under the age of 18 would end up with significant control over a Canadian asset, but we will leave that for another time. Also, there would be exemptions on a case-by-case basis. In the U.K., politicians and celebrities are often taken off. This creates, just like all government systems, a system where someone who is working the registry is now making choices about who is included and who is not.
It is an honour for me to step forward here, and it was an honour to serve on the finance committee. This is an area where I think we can do more. As the Prime Minister likes to say, better is always possible. Unfortunately, we will just have to take what we can get today and hope that a new Conservative government would do the hard work with provinces so that we could really clamp down on money laundering.
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- Jun/19/23 7:17:58 p.m.
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Madam Speaker, in his speech, my colleague spoke about certain loopholes, particularly with regard to individuals who facilitate money laundering. I am referring to lawyers, notaries and other professionals.
Would my colleague agree that, at some point, we should also legislate so that there is less of an incentive to support businesses and individuals involved in money laundering?
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- Jun/19/23 7:19:47 p.m.
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Madam Speaker, I thank the member for Central Okanagan—Similkameen—Nicola for his very substantive speech tonight. Can he share with the House how his constituents feel about ending money laundering? What do the great people of Central Okanagan—Similkameen—Nicola think the government should be doing to provide more transparency and accountability as it relates to money laundering?
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- Jun/19/23 7:20:20 p.m.
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Madam Speaker, simply put, British Columbians have heard a lot of politicians talk and talk when it comes to money laundering. We have had the Cullen commission, which seemed to talk about many of the activities, but we seem to see a dearth of action from both the federal and provincial governments.
There have been some improvements in casinos. As B.C.'s casinos tightened up, a lot more suspicious activity went on in Ontario. This requires leadership from the federal government. My constituents believe in the law. They want to see the laws enforced.
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Mr. Speaker, money laundering in Canada is a big problem, and it is a very big problem because it has a worth. That worth, as we heard in committee, is $113 billion a year. It is a staggering number.
The UN estimated that Canada's has up to 5% of the world's money laundering. Canada has become known, unfortunately, across the world as a place to park dirty money. There is even a name for Canada's ability to hide money. It is called snow washing. I think there are advertisements in some circles. It is theft, plain and simple.
While Bill C-42 aims to combat this $113-billion problem, it falls short of combatting the future of money laundering and relies on the provinces to do most of the work. The bill may do some of the work for today, and certainly in this House we can support a lot of that, but there is a lot of work to do as we move forward.
I sit on the Standing Committee on Industry and Technology, and we dealt with this very rushed bill. It came through very suddenly. We were talking about how it is tackling things not only today but tomorrow. As we went to the witnesses, we heard how it fails to address the problems of tomorrow and money laundering.
Money laundering became very popular after the 2016 release of the Panama papers. The Panama papers revealed trillions of dollars of money laundering, and there were certain lessons we were meant to learn from that. One was that there was a widespread scope. The Panama papers showed a vast scale of global money laundering and tax evasion. They exposed offshore financial activities of individuals and entities from around the world, including politicians, but we will not talk about that today.
The Panama papers exposed the use of shell corporations. They exposed the widespread use of shell companies and offshore entities to conceal the true ownership of assets and facilitate money laundering. It was of a cross-border nature. When we looked at how money was being laundered, it was being done across state lines and country lines across the world. The papers also brought attention to the role of professionals, such as lawyers, accountants and financial intermediaries, in facilitating money laundering. In other words, it was widespread.
When we talked about this with regard to Bill C-42, there were a couple of lessons the bill probably has taken into account that we can learn from. One is the need for transparency. Another is public awareness and the fact there are shell corporations using their own entities to launder dirty money.
We looked at the benefits we wanted to see from this bill in bringing it from committee to Parliament. The Conservative Party stands behind the fact that we need to combat money laundering. When it comes to certain aspects of the future of how money is going to be laundered, including blockchain technologies, the use of AI, decentralized exchanges, privacy enhancing technologies, and smurfing and layering, this bill falls short in addressing those things.
Furthermore, many people do not understand that when we look at the way we are going to collect data from these businesses when tackling money laundering, which is through the Canada Business Corporations Act, or the CBCA, it is only on 15% of businesses in Canada, meaning that we will rely on the provinces to do the work for the remaining 85%. If any last holdout province, for instance, does not want to join the registry and all of a sudden we see a certain province's limited partnerships start to skyrocket as other provinces' go down, there is pressure to be put on that particular province: Why do they want to be Canada's last secrecy jurisdiction?
This follows what we saw with the U.K. registry, where Scottish limited partnerships dropped by 80%. One way to mine the data once the registry comes online is to look for movement shifts, because of course crooks are going to go where the weakest link is. That is why it has to be a harmonized approach, not just a federal approach.
The CBCA governs the incorporation and operation of businesses at the federal level, setting the framework for corporate governance, accountability and transparency. By enforcing strict obligations on corporations, directors and officers to maintain accurate records and disclose information, the CBCA enhances transparency and hinders criminals from exploiting corporate structures for illegal purposes. Additionally, the CBCA empowers regulatory bodies, law enforcement agencies and courts to investigate suspected money laundering activities within corporations.
We heard from the RCMP at committee. One of the concerns we had was about how strict the rules are that protect whistle-blowers. We need whistle-blowers to identify where illegal activity is happening. As a small business owner myself, I have about four corporations that govern different parts of my business. Members can understand that without the ability to protect whistle-blowers, it is really easy sometimes for a small business owner to hide money and find different loopholes to hide it. I normally rely on an accountant to do that for me, but there is a reason that Canada has been able to hide $113 billion a year: It has become very easy.
One of the main aspects of this is that we have to be able to protect whistle-blowers. We asked questions of the RCMP on whether that is going to happen. This bill was so rushed that it went through committee in only two meetings, which included clause-by-clause and having testimony alongside the clause-by-clause. Some of the experts could not even get back to us, including the RCMP, on how effective this bill would be in protecting whistle-blowers, and that is a big concern.
When it comes to the future of money laundering, there was also testimony on the fly during clause-by-clause, with questions that I tried to get witnesses to answer, but the witnesses did not really have the right answers. For cryptocurrencies and blockchain, for instance, criminals may increasingly turn to cryptocurrencies for money laundering purposes. The anonymous nature of certain cryptocurrencies and the decentralized nature of blockchain technology can make it more challenging to trace and monitor transactions.
We saw that in a study we finished on blockchain technology. Blockchain is really good for Canada and good for the future. We employ 16,000 employees in blockchain, and it is worth over $2 billion. However, as we have seen blockchain for good, there is also blockchain for bad. This is certainly one aspect in the future where criminals will try to hide and launder money, and this bill would do nothing to address that.
When we talk about decentralized exchanges, criminals might explore those exchanges to launder money. DEXs, as they are called, operate on blockchain technology and facilitate peer-to-peer transactions without centralized oversight, making it more difficult for authorities to track and identify suspicious activities. We just had an incredible blockchain study, but at the same time as this bill would not address the criminal element of blockchain technology, we are not looking at the good. That is something the government is not embracing. Most times, it would rather slag cryptocurrencies and blockchain as a whole, even though we should be looking at deregulation and ensure they are part of money laundering bills.
On privacy-enhancing technologies, criminals may utilize emerging privacy-enhancing technologies that aim to provide increased anonymity and obfuscation of transactions. Those technologies could make it harder for authorities to trace the origins and destinations of funds involved in money laundering. Smurfing and layering involves breaking down large amounts of money into smaller, less conspicuous transactions.
That brings me to an amendment we brought forward that was turned down by the government. Instead of looking at ownership that was only 25% or higher, it should go as low as 10%. The technologies of the future are going to allow companies to hide more money easily, and 10% is something that we found should have been easily amended in this bill and was not.
It is important to address the potential regulatory gaps and weaknesses and make sure that this bill addresses the system that criminals may wish to exploit. As regulations evolve, criminals may identify new vulnerabilities or target regions with less robust anti-money laundering frameworks. Strengthening international co-operation and collaboration among governments and financial institutions is crucial to countering the global nature of money laundering effectively.
The Conservatives can support this bill. This bill would address the $113-billion problem. We just wish it was not so rushed. We wish that we had been able to address some of the amendments that went further. What the bill would not address is the future of money laundering, which will include blockchain and advanced technologies. This bill would just address today and would not address tomorrow.
I know that a Conservative government, which will be in power in the next few years, will be able to address that. I look forward to contributing to it to make sure that we bring down the $113-billion theft of Canadian money and work toward a better future where we have less snow washing in Canada.
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- Jun/19/23 7:47:38 p.m.
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Mr. Speaker, as I listened to my colleague's remarks, I was reminded of the debates we had at the Standing Committee on Industry and Technology.
My colleague asked some very good questions. We have heard that the amount of money laundered in Canada could be as high as $113 billion a year, which is a staggering number. According to a United Nations statistic, the amount of money laundered worldwide represents between 2% and 5% of global GDP.
Coming back to my colleague's speech, I would also like to remind him of a question he asked Ms. Ryan from the Financial Transactions and Reports Analysis Centre of Canada. This centre works primarily to combat money laundering.
How can we ensure that cryptocurrency cannot be used to circumvent the system? That was the gist of his question, and he also asked whether the current bill could guarantee the appropriate protection or whether a new bill should be introduced.
Basically, we understand that under this bill, the authorities will be using more and more mechanisms to address the issue of virtual money and the fight against money laundering. However, this is a brand new phenomenon, of course, and there are gaps in the current context.
I wonder if my colleague could elaborate on that. What does he think should be done in a future bill?
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- Jun/19/23 7:49:09 p.m.
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Mr. Speaker, there is a lot of great work my hon. colleague and I do, and I have a lot of respect for him. He does a lot of great work at the INDU committee, and I am happy to work with him.
There is a $113-billion question for money laundering, and my colleague and I are on the same page when it comes to blockchain technologies. As I mentioned in my speech, we finished that report.
When it comes to blockchain, it is tremendous for Canada, because it is about a $2-billion industry, with 16,000 jobs. With the companies and the work being done here in Canada, Canada right now, in the meantime, is considered a world leader. From there, we need bills that tackle the regulation of those industries so we can become and continue to be a leader. We also need to tackle money laundering problems that exist with cryptocurrencies and blockchain itself.
The member is right that we need a separate bill that takes up the work we completed over eight or nine meetings at the industry committee on blockchain to ensure that cryptocurrencies and blockchain are used for good in Canada. Canada can be a world leader in this. We can take the examples that have been brought to committee and make sure that Canada benefits the most from them. I know that my colleague and I would be happy to work further on that together at the INDU committee as we continue it.
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Madam Speaker, with regard to Bill C‑42, if we were to talk to our constituents today about money laundering and ask them what it is, how it works and how to stop it, I am sure they would have fairly clear and strong opinions about it.
However, some would think that we are still living in the time of Al Capone and that money laundering is actually done through laundries. Times have changed, but I will come back to that. Everyone would agree that money laundering is unfair and unethical. It is unfair to honest workers, to those who start and run honest businesses and pay their taxes.
It is unfair to all those who see that their health care system is struggling for various reasons, but I will not get into that. It is unfair to all those who are wondering how many billions of dollars a year are not going into the government coffers in Canada because of money laundering and whether those billions of dollars could be used to improve the health care systems in Quebec and the other provinces. These people are right to wonder about those things. They are right in thinking that it is unfair for some people to fly below the radar and launder the proceeds of crime or even just money that was not declared. Everyone would also agree that the governments need to do more, be stricter and put in place laws to better control money laundering.
Bill C‑42 is a step in the right direction. This bill amends the Canada Business Corporations Act while respecting what is already in place in Quebec and the Canadian provinces, while respecting the agreements already reached between Quebec and the Canadian provinces, which is certainly a good thing.
Bill C‑42 also amends the Access to Information Act, the Income Tax Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and the Budget Implementation Act, 2022, No. 1. A number of laws are being amended, but there is one that is not, specifically the Criminal Code. Perhaps we need to think about that, and I will come back to that.
As I was saying, when we talk about organized crime, people often think of Al Capone, outlaw biker gangs, street gangs and the various mafias that exist today. However, we forget that criminals can be found outside of the groups I just named. There are also white collar criminals who often fly under the radar. However, their sources of income are not necessarily any more legitimate.
As I said, some people may still think that laundering money requires a laundromat. The many ways of laundering money have been modernized, and it is important for our laws to be modernized as well. A lot of water has flowed under the bridge since the days of Al Capone, but money laundering is as lucrative as ever. It may be more insidious, but it is no less lucrative for criminals. It is a different story for our society, however.
In the U.S. alone, an estimated $300 billion per year is generated by illegal activities. This amounts to about $1,000 per U.S. resident. In Canada, the same $1,000 would add up to $40 billion in illegal activities unaccounted for in Canada and absent from the treasury. This $40 billion is only $14 billion more than Quebec and the Canadian provinces are requesting in health transfers.
That is a huge amount of money. Let us imagine what we could do by regulating this.
Transparency and the obligation of transparency are excellent means of countering organized crime. This is what Bill C‑42 proposes. If forced to name themselves or be included in a registry, people and businesses that want to launder money will perhaps think twice before trying to do it themselves or hiring investors whose purpose is to launder money. No self-respecting company wants to see its name and reputation dragged through the mud. It takes a long time to build up a reputation, but not long for it to be torn down.
However, the current law only mentions directors. Only directors can be named. Even if all the saints in heaven are sitting at the boardroom table, a company will not be cleaner or more legal if the investors and owners are demons from hell. The ideas will not be any better and the money will not be any less criminal. Naming the owners explicitly in the registry will remove the temptation for criminals to invest in businesses.
What is happening right now? We often learn about scandals from whistle-blowers. Unfortunately, they may be taken to court, have their lives threatened or, in some cases, even be imprisoned. We need to ensure that these whistle-blowers are protected because they are valuable to society.
Today's crime requires the collaboration of professionals who are very familiar with the flaws in the system. Those flaws allow them to help criminals to launder money. One of the flaws in Bill C‑42 is that it does not cover the people who knowingly help criminals launder their money or those who are forced to do so. That is an improvement we need to think about making in a future bill.
Right now, I also see that, if a company commits an offence, then it has to pay a fine of $100,000. If they refuse or fail to add certain names to the registry, then they may be fined a maximum of $100,000. For some companies $100,00 may be a lot, while for others it may be very little. It seems like a rather arbitrary amount to me. I think that perhaps we should look at other ways of calculating the fine. Perhaps, instead, the fine should be based on profits declared. We should look into that. However, as I have already said, this is still a good start.
This bill, while not perfect, is an excellent step towards greater transparency and greater honesty, and it will allow Canada to be a role model rather than a dunce. I also want to say again that this is an excellent example of co-operation rather than intrusion into the jurisdictions of Quebec and the Canadian provinces, which is quite exceptional these days. However, it is a good idea.
The Bloc Québécois will vote in favour of this bill, despite some minor flaws that can be corrected over time.
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Mr. Speaker, I appreciate the speech that the member from the Bloc made. However, I would like the record to show how interesting this is in the light of the negotiations that go on to create orders and speaking lists and whatnot. That was meant to be an NDP speech, in the midst of what I thought was the confidence and supply agreement the NDP has with the Liberals. I did not think the NDP members were big fans of bringing in what is known as “scab labour”.
I am concerned that there are certainly some parties in this place that do not seem to be taking this seriously. The Bloc Québécois members obviously want to take those spots, as do Conservatives. They want to take spots to speak about the fact that Canada has become a haven for money laundering. I think it is important that the record does show that the NDP members are not taking advantage of the spots that were allotted to them.
Specifically, my question to the member from the Bloc Québécois is this. Canada has become known around the world as a haven for money laundering. I understand that in money laundering circles, it has been coined as “snow washing”, and it represents more than $100 billion a year in economic activity. I am wondering if the member believes that this bill goes far enough. Is there more that needs to be done beyond what is contained in Bill C-42?
I know that some things were discussed in committee, but certainly there are a whole host more in addition to those. Is there more action that needs to be taken to combat money laundering in our nation?
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- Jun/19/23 8:15:45 p.m.
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Mr. Speaker, I understand where the member is coming from. I also understand where the RCMP is coming from; they are expected to do more with less, each and every day. When it comes to fraud, there are limited resources. We are finding there are limited resources for the RCMP, period. The Liberal government is running a $60-billion deficit, yet when it comes to the enforcement of crime, whether it be in fraud, as my colleague referred to; in things like simply proving a firearm is a firearm; or in the area I used to prosecute in mostly, Internet offences against children, it takes 12 months to 18 months to analyze a hard drive. The RCMP needs more resources.
It is puzzling to me how the government could rack up $60 billion in deficit and still have a national police force that does not have the resources to deal with these extremely salient issues of the day. To me, that is unacceptable; I agree with my colleague. These things, and commercial crime, fraud and money laundering, impact each and every one of us. We do not always see the impact of them, but they do impact us.
I would like to see the government focus its spending and divert some of the funds that, in my view, are being recklessly spent, to matters of significance like the one the member raised.
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- Jun/19/23 8:29:52 p.m.
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Mr. Speaker, by interoperability we understand the connections and interplay between the provincial laws and the federal law that enable them to work together. It is imperative and fundamental that these laws can work together so that the work done upstream or downstream—whether at the federal or provincial level—can be constructive and effective, particularly against money laundering.
I think my colleague is right, and I thank him for that. I must say publicly that my colleague is a very fine individual who does great work on the Standing Committee on Industry and Technology and who always makes an effort. As he said earlier, we do not always agree. However, in general, I think his arguments are geared towards the common good of Quebec and Canadian society as a whole. That is what we are arguing for as well. To answer his question, I think it goes without saying. Everyone should realize that this is really something that should be interoperable.
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