44th Parl. 1st Sess.
March 22, 2023
- Bill C-289 is a proposed law that would change the Criminal Code to make it illegal for someone to purposely give false or misleading information when verifying the identity of a person or organization under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This includes making false statements or omitting important information. If someone is found guilty of this offense, they could face fines up to $1,000,000, imprisonment for up to 10 years, or both, if tried as an indictable offense. Alternatively, if tried as a summary conviction, they could face fines up to $10,000, imprisonment for up to two years less a day, or both.
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Madam Speaker, the question before us is not just whether the Iranian Islamic Revolutionary Guard Corps is a terrorist entity. Its actions over the past four decades are such that such a designation is logical. It is also long overdue, and that may be why the government has so far refused to act. Having ignored past pleas from Iranian experts and from other Canadians, the Liberals are too embarrassed to admit their mistake and do the right thing.
Following the protest in Iran, since the death of Jina Mahsa Amini, Conservatives have been calling on the Liberal government to support the Iranian people's fight for a free and democratic Iran by listing the IRGC as a terrorist entity under the Criminal Code of Canada. The Liberals refused.
The murder of Jina Mahsa Amini was just one on the long list of violations of human rights committed by the Iranian regime. The torture and death of Montrealer Zahra Kazemi, the execution of wrestler Navid Afkari, the imprisonment of lawyer Nasrin Sotoudeh and the shooting down of Ukrainian International Airlines flight 752, which killed dozens of Canadians, are examples of a regime that has no respect for its own citizens or for those of other countries.
The IRGC is a part of this regime and is instrumental to its continued existence. The IRGC has terrorized the people of Iran for decades and has openly declared support for other terrorist organizations such as Hezbollah and Hamas, both listed in Canada as terrorist entities.
In June 2018, the government, including the Prime Minister, voted to list the IRGC as a terrorist entity. Despite the motion being approved by the House of Commons, and despite the IRGC downing flight 752 and killing Canadians, the government has yet to list this organization as a terrorist entity. To me, this is shameful. Does the government not understand that Canada needs to take a stand for what is right?
This government's level of hypocrisy has been so big that it does not walk its talk. It does not do what it needs to do. It makes promises, and it breaks them. This is how hypocritical the government has been on this very important issue of protecting Canadians and on making sure that Canada stands where it is right to be.
It was a little more than four years ago when the IRGC shot down flight 752, killing 176 people, including 55 Canadians and 30 permanent residents. This was a mass murder of Canadians. Countries have gone to war over less than that.
The families of those killed in that attack received sympathy from the Liberal government but nothing was done to bring the perpetrators to judgment. Nothing was done to stop them from operating in Canada however they see fit.
There is no doubt that Iran is a state sponsor of terrorism. There is no doubt that the IRGC is one of the prime movers of Iranian terrorist policy and action. There is no reason for Canada to sit by and do nothing. There are an estimated 700 Iranian Agents operating in Canada. If one asks Iranian Canadians whether they feel comfortable speaking up against the regime, they will tell one stories of harassment for their extended families, not only back in Iran, but also here on Canadian soil.
Two years ago, CSIS confirmed that it was investigating what it saw as credible death threats against Canadians coming from inside Iran. In failing to list the IRGC as a terrorist organization, the government could be seen as not caring about the safety and security of Canadian citizens faced with this foreign threat. Certainly, the Liberal government has not sunk so low as to put the protection of terrorist organizations ahead of the safety of Canadians, has it?
Finance Canada officials testified in committee that more than $100 billion is illegally laundered in Canada each year. A leading report recognizes that Canada has become known for snow-washing, given the prominence of money laundering here. I should not need to remind the Liberals that combatting money laundering is a federal responsibility.
With his lackadaisical attitude, the Prime Minister has allowed criminal organizations, including the IRGC terrorist organization, to take advantage of soft-on-crime Liberal policies. Because of the Liberals' refusal to list the IRGC as a terrorist entity, we have no way of knowing how much of the Iranian regime's illegal money laundering in Canada goes undetected. Finance Canada officials have admitted that the government does not know whether the IRGC is fundraising for terrorist activities through the Canadian charitable sector. Simply put, the government is not doing its job.
Common-sense Conservatives have put forward real solutions to mitigate money laundering in Canada. Conservative Bill C-289 proposes changes to the Criminal Code to make it easier to catch and convict criminals laundering money in Canada. That would include IRGC agents. However, the NDP-Liberal coalition voted against the bill. The failure of the government to take terrorism and money laundering seriously allows for murderous entities like the IRGC to operate freely in Canada.
The government needs to wake up and finally list the IRGC as a terrorist organization. To do so would bring us in line with our allies, countries such as the United States, that understand the seriousness of this situation, even if Canada's government does not. Other countries understand that an organization that has involved itself in conflicts in Lebanon, Yemen, Iraq and Syria, should not be allowed to freely export violence and chaos.
The IRGC is open in its support for Hamas and Hezbollah, two organizations that have been recognized as terrorist entities. It does not make sense that the organization that funds the activities of Hamas and Hezbollah should not be called to account for its terrorist actions. What we are discussing here is an organization with a history of exporting violence and mayhem as it seeks to destabilize other countries in the region. Not only that, but this is an organization that is used as a tool of state-sponsored torture and oppression against its own citizens.
We have talked about this in the House before. The will of the House is to have the IRGC listed as a terrorist organization here in Canada. Apparently, though, despite the overwhelming evidence, that is not the will of the Liberal government. I do not understand the reasons for its inaction. It is not as if it believes that it should sponsor terrorism and terrorist organizations. If it does not believe the reports from CSIS or Finance Canada, it should say so. Canadians deserve an explanation for years of Liberal inaction.
The time for empty words and hollow announcements is over. It is time for the government to take action, support the Iranian people's struggles for freedom, do the right thing, and list the IRGC as a terrorist entity in Canada.
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I declare the motion defeated.
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Pursuant to an order made on Thursday, June 23, 2022, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-289 under Private Members' Business.
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Pursuant to an order made Thursday, June 23, 2022, the division stands deferred until Wednesday, March 22, at the expiry of the time provided for Oral Questions.
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Madam Speaker, it is a pleasure to be here again with you today to talk about a very important issue.
I want to thank all members who participated in this debate, whether they agree with this piece of legislation or not, but in particular my friends from the Bloc, who spoke in favour of this piece of legislation, which I think is very important.
I would like to touch on a few things for members to reflect on.
The NDP position is that the bill is somehow not worthy of being supported because it was not a specific recommendation of the Cullen commission. The Cullen commission went to great lengths to make sure everybody knew that it did not have the resources or the ability to make recommendations with respect to federal jurisdiction.
I did my homework. I spoke to members of the Cullen commission and asked them if a bill like this would make it easier for law enforcement. The answer was yes. Therefore, I would ask the members of the NDP not to take my word for it, but to spend next week, especially those from British Columbia, asking NDP MLAs in British Columbia if they support this piece of legislation. All I ask for is a fair hearing on that point, because the Premier of British Columbia said that it is a “shocking” example of the shortfalls of federal financial crime law that money launderers cannot be prosecuted and convicted in British Columbia. That is the issue.
These cases are incredibly complex. In the United States, people are convicted for lying to the authorities or committing perjury more often than they are for the actual offence for which they are being investigated.
With respect to the position of the government, and I understand the government should meet any changes to the Criminal Code with high scrutiny, it refers to the offences of uttering and fraud, which do not carry a very significant penalty. The provision I am putting forward is one with up to 10 years in prison and up to a million dollars in fines. It is a hybrid offence. Members do not need to worry because there are no mandatory minimums in this Criminal Code provision.
The government also mentioned the laundering of proceeds of crime. I would say this. The example we just had in B.C. is the reason why we need simpler Criminal Code provisions to catch, prosecute and convict money launderers. These cases take multiple years and often yield absolutely no results.
I would like to quote Kevin Comeau of the C.D. Howe Institute, who stated:
That lack of legal accountability in our anti-money-laundering system weakens the quality of information received from clients, places our financial, commercial, and real estate markets at greater risk of money laundering, and undermines the ability of law enforcement agencies to investigate money laundering and terrorist financing.
The federal government can reduce these risks by enacting legislation attaching sanctions to false reports of beneficial ownership made to persons who are legally required to collect that information.
The government is going to release beneficial ownership legislation, and this is what is going to be in it: There is going to be an administrative penalty that money launderers will view as the cost of doing business and a tax. It will not be a serious penalty, and money launderers are going to continue to view Canada as a safe haven to do their dirty business.
Therefore, I would ask and implore all members in this House to reflect on some of these comments, and I would ask NDP members in particular to go to British Columbia and ask their provincial counterparts if they support this legislation.
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Madam Speaker, it is a pleasure to rise and support Bill C-289 from my colleague, the member for Simcoe North. I want to congratulate him for taking on this important issue. This is a bill aimed at combatting money laundering. As we move towards the second reading vote on this bill, I wanted to share a few thoughts that reflect conversations I have had. In particular, I have had conversations with people in Canada's cultural communities about their concern over the issue of money laundering. They are especially concerned when it involves money from foreign hostile regimes, sometimes even ones that are using those resources to threaten and hurt people from cultural communities here in Canada.
I want to say parenthetically, as it is Thursday, that I have had my son Judah with me all week. He is seven years old, and it has been wonderful to have him here. I want to thank him. He has been to committee meetings and to the House. He has watched question period, and he knows the rules and procedures better than some members do.
On the subject of Bill C-289, this excellent bill that I will certainly be supporting on money laundering, I want to reflect a bit on some of the conversations I have had. When I first got elected in 2015, I had a role involving human rights and religious freedom. In that context, I spent a lot of time getting to know leaders in various cultural communities in Canada.
Right away, the issue of money laundering came up in this context: We have people who flee authoritarian hostile regimes, who face persecution. Forms of that persecution also involve having their property confiscated and taken from them in various ways. Then they have fled to Canada and sought a new life; they are working hard to prosper and succeed here. At the same time, they see or perceive agents of that same hostile regime that are bringing stolen money to Canada and trying to launder that money and to create a safe haven for agents of that regime here.
Probably most prominent in my mind in terms of these conversations are those with the folks from the Iranian community whom I have spoken to. Regularly and repeatedly, they raise the issue of how the Iranian community here in Canada is concerned about how the Iranian regime is, in their perception, laundering money in Canada. In addition, while Canada is rightly perceived as a place where those fleeing that regime and other hostile regimes can come, they see how members of that regime have been able to try to use Canada as well.
We have put forward various measures to try to respond to this. For instance, approaching five years ago, I put forward a motion to list the IRGC as a terrorist organization in Canada and effectively shut down its operations here. Unfortunately, while the government voted for that motion, it never implemented it.
If we are going to shut down the activities of hostile foreign regimes in Canada, we need to take a series of measures. Those include listing the IRGC as a terrorist organization and expelling foreign diplomats involved in foreign interference, which we have been calling for in the context of the regime in Beijing. The current government has actually failed to expel any diplomats from any country for foreign interference. It has not expelled any diplomats associated with the Chinese Communist Party, nor has it expelled any Russian diplomats or diplomats from any country.
In addition, in the suite of measures that we need to prevent hostile regimes and maligned foreign actors from operating in Canada, as part of our response, we need to combat this issue of money laundering and the financing of these regimes. This could perhaps include financing of their operations in Canada, as well as their efforts to launder money for various other purposes here.
We as Conservatives have tried to reflect these concerns that we are hearing from people in cultural communities about how they have been victims of foreign interference and about money laundering in particular as part of that victimization, as well as other areas. However, it has been striking to me that one of the government's tactics for dismissing this is to suggest that it is somehow racist to talk about the very real and obvious problem of foreign interference.
I would submit that the opposite is true. It is actually a form of racism to not respond to the serious problem of foreign interference, because the primary victims of foreign interference have often been cultural communities, where there may be family members back home, and people are threatened by the fact that their family members would be hurt if they do not cease speaking up about certain issues.
I know people personally whose family members have been negatively affected abroad because of political activities they have been involved in here in Canada. I know that those threats can be frequent and can be put forward by hostile regimes. It is generally Canadians who have those family members in potentially vulnerable situations who are most likely to be victims. They are people who are recent immigrants to Canada, who faced persecution, who faced confiscation of their property, and then they see that money laundered in Canada and they see a government that is perversely claiming it is racist to talk about this problem.
I would say it is actually a form of racism to fail to address this problem that may not be directly impacting the lives of people whose families have been in Canada for a long time, but it is much more likely to impact the lives, security and well-being of people who are relative newcomers to Canada, of course depending on the countries they come from.
There are many reasons to support this bill. This is a common-sense measure to make it easier for law enforcement to target those who are involved in criminal offences and to hold them accountable for those offences. However, particularly in a context where we are seeing this pressing issue of foreign interference taking various forms and where we need stronger measures here in Canada to combat the scourge of foreign state-backed interference, one thing we could do is support this bill. Members could at least support it through to committee for further studies if they have doubts about some of the provisions. I think it is great the way it is. In any event, it should be supported through to committee so that it could be further studied and perhaps strengthened at the committee stage.
Unfortunately, while the government wants to now talk about being concerned about foreign interference, it seems intent on missing this golden opportunity to support a good piece of legislation, which would take a constructive step towards, among other things, combatting the problem of foreign interference. It underlines, again, that while the government is happy to talk tough, ultimately its talk is cheap and it is not prepared to take the measures that are required.
The government has refused to call a public inquiry into what happened in the last two elections. It is instead trying to bury this issue with fake new positions and by sending the issue to a committee that has, in fact, already studied the issue of foreign interference, but which is severely limited by secrecy rules and cannot report publicly. It must report first to the Prime Minister, and then it can only publish the information that the Prime Minister allows it to publish.
Incredibly, today on Bill C-289, the government and its coalition partners in the NDP seem intent on opposing a common-sense piece of legislation to combat money laundering.
I appeal to individual members of the Liberal and New Democratic Parties to think about what they are hearing from their constituents, to think about how many Canadians of Iranian origin, Canadians of Chinese origin, and Canadians of Russian or Ukrainian origin have seen the impact on their lives, of threats from hostile foreign powers. If we listen to those concerns, we should do all we can to combat the scourge of foreign state-backed interference. One critical way of doing that would be to support Bill C-289.
I hope we see individual members of the governing party and the NDP searching their consciences, thinking about what their constituents would actually want them to do and not blindly deferring their judgment on such critical issues to a front bench that has, frankly, been totally obtuse when it comes to crime, foreign interference and national security.
I do hope that, notwithstanding the positions of those two parties officially, we will see members have the courage to help us pass this bill, send it to committee and continue to do the work required to stand with all Canadians, Canadians of all backgrounds, in defending justice and human rights, and in opposing foreign interference via money laundering and other means.
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Madam Speaker, like my colleagues, I am pleased to rise to speak to Bill C-289. I think my colleagues beat me to the punch, but I will say again that the Bloc Québécois will support Bill C‑289 at second reading. For one thing, we want to be able to suggest amendments and improvements when it goes to committee and perhaps cast the net a little wider, so to speak, in terms of the bill's scope. I will come back to this a little later.
What is the context surrounding Bill C‑289?
The reality is that money laundering is unfortunately reaching alarming levels in Canada. Several institutions have conducted analyses and reached that conclusion. It is estimated that approximately $100 billion is being laundered, and it is often the proceeds of drug trafficking and human trafficking. That is $100 billion that comes into Canada every year to be laundered, to enter the legitimate economy and to disappear. That is the principle of money laundering.
This has repercussions on the local population, on everyday people who, for example, live in places with a very low vacancy rate and where people are trying to become property owners. As we know, real estate is used as a way of laundering money by buying different buildings through nominees, which puts upward pressure on the price of housing. This has an adverse effect on everyone.
We also know that, unfortunately, Canada does not have a particularly good record when it comes to anti-money laundering legislation. Canada is at the back of the pack internationally. Our laws are relatively limited and rather lenient, and they do not make it easy to go after offenders and money launderers. That is basically what Bill C‑289 tries to do. It is not going to fix the whole problem in one fell swoop, but at least it is a step in the right direction. It may help stimulate the debate on what more could be done beyond what Bill C‑289 proposes.
It is always fun to read what is in the bill. This one is relatively short. I will just read the main clause, which is actually the only clause. It would add subsection 462.311(1) to the Criminal Code. As an aside, so many new sections have been added to the Criminal Code over the years that it might be time for consolidation. That is for my criminal law colleagues to say.
The addition reads as follows:
Everyone commits an offense who knowingly makes a false or misleading statement or knowingly provides false or misleading information, including by omission, whether directly or indirectly—
This casts a pretty wide net for what constitutes a lie. It goes on to say:
—to a person or entity referred to in section 5 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act respecting the identity of a person or entity to be verified under section 6.1 of that Act, including with respect to the ownership, control or structure of the entity.
Who are we referring to when we talk about section 5? Who are these people who have an obligation to verify identity? We are referring to pretty much every existing entity that deals with money transfers. We are talking about banks, both local and foreign. The list set out in section 5 is very long, so I will not go through the whole thing. I will just do a quick overview. We are talking about banks, cooperative credit societies, savings and credit unions, caisses populaires, life insurance companies, trust companies regulated by a provincial act, loan companies, companies that provide portfolio management services, companies dealing with foreign exchange, and even those dealing in virtual currencies. If money is being transferred somewhere, the entity that takes care of it has an obligation to verify the sender's identity. The problem is that there are absolutely no sanctions for providing false information.
Bill C-289 remedies that. It adds an obligation to provide truthful information or face one of two fines, depending on whether the person is found guilty of an offence punishable on summary conviction or an indictable offence. The penalty for an indictable offence is a fine of up to $1 million and up to 10 years in prison. The penalty for an offence punishable by summary conviction is a fine of up to $10,000 and a maximum prison sentence of two years less a day.
There are some good things in this legislation. One aim of the bill is to discourage the use of nominees. Currently, there is absolutely no penalty for a person who is used as a nominee for the purpose of money laundering. The new obligation would provide authorities with additional tools so they can secure convictions for money laundering activities. The bill does not limit itself to the obligations of financial institutions. It seeks to ensure that there are penalties for false statements.
We also want to give authorities a little more flexibility to use the threat of conviction. That is the deterrent effect. This would allow authorities to gather information on large-scale money laundering cases and perhaps catch criminals with a lot more money than the small-time money launderer at the local pizza parlour, for example.
It also sets the stage for other steps that could be taken in the future, such as introducing a beneficial ownership registry that would require corporations governed by the Canada Business Corporations Act to disclose the identity of their actual owner. We hope legislation to that effect will be introduced in the House sooner rather than later.
I want to go back to the responsibilities of the financial entities that I mentioned, which are named in section 6.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Pursuant to section 7, these entities are responsible for the following:
Subject to section 10.1, every person or entity referred to in section 5 shall, in accordance with the regulations, report to the Centre every financial transaction that occurs or that is attempted in the course of their activities and in respect of which there are reasonable grounds to suspect that
(a) the transaction is related to the commission or the attempted commission of a money laundering offence; or
(b) the transaction is related to the commission or the attempted commission of a terrorist activity financing offence.
There has been a lot of talk lately about Chinese interference. In this context, it seems to me that there is one thing that could, at the very least, be discussed by the committee that will be studying the bill, and that is the use of money that is not necessarily the proceeds of criminal or terrorist activities, but that is earmarked for an election campaign, for example.
I am wondering if certain witnesses would suggest that we add, not to the current bill but to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, a paragraph (c) to section 7 to cover the conveyance of money with a view to making an illegal donation under the Canada Elections Act. That could be one approach.
There may also be a way, through Bill C‑289, to make changes in order to make it an offence to lie about a donation to a political entity and the origin of the money that was used. This may be an idea to consider, given what is currently happening in the news. We are always a bit behind the news when we are in the House of Commons, but in this case, it may be a good idea not to lag too far behind. We might need to jump at the opportunity, at the fact that a bill is being studied, to invite witnesses who could outline a more forward-thinking vision of what could be done in terms of sanctions for making false statements about campaign donations.
In closing, I want to reiterate that we will support Bill C‑289 and there is still a long road ahead, but at least this is a step in the right direction.
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Madam Speaker, Canada has a significant money-laundering problem, and corrupted money comes flooding into our economy on account of that. Nowhere is that more evident than in Vancouver. Professional money launderers have a term for it. It is called the “Vancouver model”. It usually involves a lot of foreign, corrupt money, and it is distorting our economy.
We learned a lot about money laundering in British Columbia recently, with the release of the report from retired judge Austin Cullen. He had been appointed by the provincial government to head up the commission of inquiry into money laundering in B.C.
He heard from 199 witnesses, produced a report of 1,800 pages and summed up his work succinctly with this statement: “This Inquiry explored the myriad ways in which the greedy and the devious seek to make their crime-stained money appear legitimate.”
The Cullen commission found that, between 2008 and 2014, which were the years of his focus, billions of dollars were laundered through B.C. casinos. The report stated: “In 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more, including [almost 2,000] individual cash buy-ins of $100,000 or more”. The report noted that this is an average of five per day.
At least in British Columbia, we are all familiar with the scenes that we saw on television. There were clips taken from the security cameras in casinos of people walking in with hockey bags full of money and $20 bills all neatly stacked up for easy counting and managing. Those are used to buy casino chips.
The commission found that these transactions usually happened late at night or early in the morning, when law enforcement people were not paying attention. Judge Cullen put it this way: “It should have been apparent to anyone with an awareness of the size and character of these transactions that Lower Mainland casinos were accepting vast quantities of proceeds of crime during this time period.”
This is just to state the obvious. One does not need to be a law enforcement specialist to know that this did not pass the smell test. As a matter of fact, in the words of a senior investigator with B.C.'s gambling regulator to the commission, the cash “smells like drug money”. He went on to note that it was simply not the practice of casino operators to make any inquiries of their patrons about their sources of cash. Operators would not ask, and patrons would not tell.
I do not want to be too hard on the BC Lottery Corporation. It has done a lot of things right. People have the right to go to casinos and lose money. I want to make just a couple of important points about things that they did correctly.
In February 2015, the BC Lottery Corporation called on the RCMP to investigate a number of people that it suspected of organized crime. Following that investigation, the BC Lottery Corporation put certain persons, about 600, on a watch-list, requiring them to prove source of funds.
A couple of years later, it expanded its source-of-funds procedures based on recommendations from Dr. Peter German, who had been appointed by the provincial government to investigate this. It is not that the BC Lottery Corporation did nothing, but it just did not do enough.
One of its representatives, giving evidence at the Cullen commission, put it this way: “Viewed from the lens of what we now know, everyone could and should have responded more quickly to those large cash transactions”.
I am happy to say that the B.C. government has taken this seriously. It has attempted to prosecute at least one bad actor for whom it felt that it had enough evidence about significant amounts of money-laundering activity.
The Joint Illegal Gaming Investigations Team conducted the investigation, and they recommended charges to the BC Prosecution Service. However, looking at all the evidence, the Crown counsel said that they did not have enough evidence and that there was not a substantial likelihood of conviction. That is their standard test.
The current premier, David Eby, was the attorney general at the time. This was his file, and he was not going to take that lying down. Therefore, he tried again.
He told his assistant deputy attorney general to retain the services of a special prosecutor to look at it once again and this time to, if necessary, use the exceptional evidentiary test of a reasonable prospect of conviction, so a much lower standard. Here is a political lesson. If one does not succeed the first time, try it again but lower the bar. This was a political decision and I think it was the right one. There was a very real concern in British Columbia that something had to be done in order to stop the erosion of public confidence in our justice system.
The result of the independent, special prosecutor investigation with a lower bar now, unfortunately, was still no. In his words, the critical question was whether the Crown would be able to demonstrate beyond a reasonable doubt that this cash was itself the proceeds of crime. He concluded that they would not be able to do that. There was lots of smoke but he could not put his fingers on the fire. Just very recently, he told the provincial government not to waste its time or its human resources trying to change this, that it would be unsuccessful and that it should change the law instead. He said in his conclusions that if Canada had laws, anti-money laundering laws similar to what the U.K. and Australia have, his opinion might well have been different.
That brings me to the debate of the day, the private member's bill from my colleague, the member for Simcoe North. I want to thank him for introducing Bill C-289, which would amend the Criminal Code to make it an offence to knowingly make a false or misleading statement or to knowingly provide false or misleading information, to a person or entity listed in section 5 of the Proceeds of Crime and Terrorist and Financing Act; false information with respect to the verification of individuals. In other words, do not lie to banks, credit unions, other financial services businesses and, importantly, do not lie to casinos about whose money you are dealing with. We want to know. There needs to be transparency. It would make a difference, if we had that law, as to whether we would be prosecuting some of these cases of obvious money laundering.
It is a very serious crime. If this legislation passes, it would make it an indictable offence with a fine of up to a $1 million or jail time of 10 years, or the Crown counsel could decide to go by way of summary conviction with a possible fine of $10,000 and two years less a day in jail.
I am pleased and people in British Columbia are pleased with this type of legislation because that is exactly what needs to be done. It is a small step, but it is an important step in the right direction.
More needs to be done. I am happy to hear that the Liberal government is again saying that it is going to bring forward legislation for transparency in corporate registries. In Justice Cullen's words, we do not want “the greedy and the devious” to hide behind numbered companies as they “seek to make their crime-stained money appear legitimate.” Mr. Justice Cullen had 101 recommendations. Not all of them were for the federal jurisdiction. There are a couple that I think this Parliament needs to be paying attention to in the near future, not today but soon: fighting trade-based money laundering, closer scrutiny of money service businesses, better regulation of the mortgage industry and procedures for unexplained wealth orders. This is legislation that other countries and jurisdictions around the world have adopted against money laundering. We should be doing the same. Today, I am happy to say, we are taking a small, important step in the right direction.
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Madam Speaker, first of all, I want to say that I cannot believe the Liberal government's stance on this bill and how weak the arguments are. I find it unacceptable. What a joke.
I am pleased to speak this afternoon to Bill C‑289, introduced by my friend and colleague on the Standing Committee on Finance, the member for Simcoe North. As my colleague from Rivière‑du‑Nord said last October, the Bloc Québécois is in favour of this important bill.
This bill will amend the Criminal Code to make it an offence to give false or misleading information to a financial institution requesting that information in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. As we know, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act currently asks financial institutions to verify their clients' true identity and the source of funds under certain circumstances. Financial institutions must also report transactions they deem suspicious to the government, so the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, can carry out the necessary verifications, prevent laundering of the proceeds of illegal activities and prevent such funds from being used to finance illegal activities, such as terrorism.
The problem with the current situation, which the Liberals do not seem to understand, is simply a lack of vigilance. I see this bill as a step in the right direction to increase everyone's vigilance. The government's lax attitude and lack of vigilance are a problem right now, even though the tracking of dirty money is one of the most important areas of action.
The problem with the current situation is that if a client makes a false statement to their bank, they may get away with it because there is minimal verification. It is important to do more to combat money laundering.
The problem with the current situation is that if a client makes an intentionally misleading or incomplete statement, the consequences are not serious enough. There are virtually no consequences for these criminals, so there is every chance that they will fall through the cracks. As a result, the information that FINTRAC obtains is incomplete and its work becomes less effective. This explains the poor results in this area in Canada, contrary to what has been argued on the other side of the House.
This is how this chain of negligence results in dirty money being laundered in the real economy. Bill C-289 addresses this flaw. The bill does not fix everything, but it is one more step in the right direction to better uncover money laundering activities.
I want to provide an example connected to the sanctions against Russia. It is not a direct example of tracking dirty money, but it does illustrate the lack of vigilance at present. Early this week, two Montreal companies were sanctioned by the United States for circumventing economic sanctions against Russia. These companies are distributors of electronic components. In tracking the money, the Americans discovered that these two Montreal companies were circumventing the sanctions.
Why were Canadian authorities not able to uncover this scheme? Why were our southern neighbours doing our own institutions' job for them?
The reason may be the lack of vigilance and the lax attitude. That has to change. We must change the existing culture. We have been speaking a great deal about the Chinese government's interference. We have to figure out a better way to track illicit money in order to guarantee our independence. We must change attitudes. That is what this bill helps accomplish.
Members will recall that last May, the Italian consulate in Montreal organized an event to mark the 30th anniverary of “operation clean hands”, a vast anti-mafia and anti-money laundering operation during which two Italian judges were murdered. Retired Italian judge Roberto Scarpinato came to Montreal to give us a warning. He told us that Canada had become a haven for mafia activity and money laundering. Society needs to do something. He encouraged us to develop “antibodies” to money laundering. He said we needed to stop being naive, to be more vigilant and to not be afraid to enforce our laws to the fullest extent, because money laundering is a scourge in Canada and in Quebec.
According to Transparency International, the amount of money laundered annually in Canada could be between $43 billion and $113 billion.
This means that up to $113 billion a year in proceeds of crime, from both here and abroad, is being reintroduced into our economy, allowing criminals to reap the benefits of their crime with impunity and causing economic distortions, such as skyrocketing real estate prices. It is an appalling situation and the complacency we are seeing is pitiful. Something needs to change.
British Columbia launched a commission of inquiry into money laundering, the Cullen commission. The Cullen commission may be the most comprehensive effort ever made to understand the phenomenon of money laundering in Canada, its effects, its causes and the best ways to prevent it in future. It submitted its report in June after more than two years of work and hundreds of witness testimonies. The report points the finger at the RCMP and FINTRAC for not taking money laundering seriously enough. It excoriates the banks for looking the other way. In fact, it accuses pretty much everyone of negligence. It also provides examples of what money laundering looks like.
There is the case of Runkai Chen, a Chinese immigrant who came to Vancouver in 2006. Despite reporting about $40,000 in annual income, he built a real estate empire worth tens of millions of dollars. Mr. Chen was a straw man who laundered dirty money from China. He regularly received large transfers from foreign numbered accounts and reinvested the money in real estate. He made false statements to financial institutions here, and they did not ask questions. None of the big Canadian banks raised any red flags. Not RBC, not CIBC, not BMO.
It was actually a foreign financial institution that alerted FINTRAC, and that is how the scheme was uncovered. Foreigners are more vigilant than our institutions when it comes to finding dirty money laundered here. It is this kind of negligence every step of the way that Justice Scarpinato was talking about when he said we need to develop antibodies.
We actually already have a lot of the legal arsenal needed to deal with this problem. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act is a powerful tool. Banks are required to verify the identity of their clients and where the money is coming from. They have the power to freeze funds they deem to be suspicious. They are required to report suspicious transactions, large amounts of cash, and international transfers if they have difficulty determining where the money actually came from.
These requirements exist, but most of them rely heavily on the client acting in good faith and the financial institution being vigilant. By forcing clients to make true and complete statements to the banks or face criminal penalties, Bill C‑289 addresses the first step, which is to verify the identity of the client and the source of the funds. This could start off a virtuous cycle where the financial institutions themselves would be more diligent about checking and government organizations would be better informed and more likely to co-operate with their counterparts abroad. In short, we could begin to develop the antibodies needed to seriously address the scourge of money laundering. That is why we will support this important bill.
Once again, I denounce what I believe to be the spurious arguments of the Liberal Party in opposing this bill. At present, there is a lack of vigilance and rigour in the tracking of dirty money. We must take action. Bill C‑289 sets the bar. As I was saying, that is why we will support it.
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Madam Speaker, let me begin by acknowledging that we are gathered here on the traditional lands of the Algonquin people.
I am pleased to join this debate on Bill C-289, an act that would amend the Criminal Code regarding identity verification, which was introduced by the member for Simcoe North on June 16, 2022. I want to congratulate the member and thank him for all his work.
Although this bill proposes only one change, it seeks to address an important and topical issue in Canada: combatting the serious crime of money laundering. The bill aims to discourage money laundering through the provision of false identity information to certain financial institutions and business professions. It would amend the Criminal Code to add an offence of knowingly providing false or misleading information to these regulated entities when they collect and verify the identity of their clients under the rules set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Money laundering is a serious challenge faced by all countries. It compromises the integrity of the financial system and represents a threat to global safety and security. By its very nature as unlawful activity, the scale and scope of money laundering are difficult to measure. Nonetheless, a 2020 study entitled “Estimating money laundering flows with a gravity model-based simulation” estimated that $37.8 billion U.S. may be laundered annually in Canada, which represents over $50 billion Canadian.
As highlighted a moment ago, the bill proposes one change to address the provision of false information to regulated entities. It is important to consider that an entity responsible for verifying identification under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act may face significant administrative monetary penalties or criminal prosecution if it fails to carry out its regulatory requirements to identify and verify its clients.
Another important consideration in examining this bill is that there are already offences in the Criminal Code that address the activity and its target. The offence of uttering a forged document can apply when a person opens a bank account or purchases real estate for the purpose of money laundering and knowingly uses forged identification documents. The offence of fraud can only apply when a person provides false or misleading identification or other information to a real estate agent or other regulated entity and that entity faces economic loss as a result.
Of course, laundering the proceeds of crime itself is a criminal offence. That offence consists of any dealing in proceeds with the intent to conceal or convert those proceeds while knowing or being reckless as to whether all or part of the proceeds were derived from the commission of an offence. An important feature of the offences I mentioned is that they are broad in scope and can apply to a wide range of conduct.
We are aware that money launderers continually shift their methods and approaches to evade regulation and law enforcement. The final report of the Commission of Inquiry into Money Laundering in British Columbia, known at the Cullen commission report, highlighted the nature of the problem of money laundering in that province in the casino, real estate and luxury goods sectors. It also considered less well known but equally serious aspects of the problem, such as trade-based money laundering, and it examined the fast-growing options for money launderers, including the use of cryptocurrencies, private exchanges and cryptocurrency ATMs.
Responses to the challenge of money laundering may be more effective if they are sufficiently flexible to respond to a variety of situations. New offences are likely to be more effective if they come from the numerous ancillary tools in the Criminal Code that are available to investigators and prosecutors. Relevant examples include the use of wiretaps in appropriate circumstances or the ability to rely on copies of stolen identity documents in a court proceeding so the originals can be returned to the rightful owner or destroyed, if appropriate.
Bill C-289 does not propose any amendments that would enable the use of these tools for the investigation or prosecution of the offence proposed in this bill. This undermines its effectiveness.
Money laundering can compromise the integrity of financial institutions, businesses across the economy and the investment climate. When states fail to take concerted and coordinated action, the risks are clearly significant. Rightly so, the government has made concerted efforts in recent years to address the risk of money laundering and has been active in international forums.
I am aware that it works to advance international anti-money laundering initiatives through the G7 and the G20, as well as the Egmont Group of Financial Intelligence Units, which is an international organization that facilitates co-operation and intelligence sharing between national financial intelligence units, and through its leadership role in the Financial Action Task Force, of which Canada was a founding member.
Not only that, but Canada's anti-money laundering and anti-terrorist fundraising measures are regularly reviewed by its peers through the FATF. I am pleased to have learned that, in October 2021, a follow-up review by this body placed Canada amongst the best-performing jurisdictions of the world. The FATF recognized the impact of the government's ongoing commitment to address the problem of money laundering in Canada.
The government has continued to step up its efforts. A few important examples of its efforts since 2020 include new regulations that apply to virtual currency service providers, including foreign providers operating in Canada, and new rules that apply to virtual currency transactions, which entered into force in 2020.
Furthermore, to assist in strengthening Canada's response to financial crime, the Financial Crime Coordination Centre, or FC3, was established as a five-year pilot initiative led by Public Safety Canada in 2019. It brings together anti-money laundering professionals from across jurisdictions with the aim of enhancing inter-agency collaboration and capacity building through a number of means, including training and expertise development, legislative and policy initiatives, partner support, and best practice resources.
Another example includes the commitment of approximately $28 million over four years, and $10 million ongoing, to create a multi-disciplinary fraud and trade-based money laundering centre of expertise at the Canada Border Services Agency to strengthen our capacity to tackle this borderless crime.
The government also committed $98.9 million in 2020 to support the Royal Canadian Mounted Police in strengthening its federal policing capacity. This investment included $19.8 million to establish new integrated money laundering investigative teams across Canada. These teams include police officers, lawyers, forensic accountants and other specialized experts, led by the RCMP. They investigate crimes that are using capital markets to harm the economic interests of Canada.
Mostly recently, in the budget tabled on April 7 of last year, the government accelerated its earlier commitment to implement a public and searchable beneficial ownership registry, which would now be accessible before the end of 2023. The government also committed to working with provincial and territorial partners to advance the national approach to a beneficial ownership registry of real property.
Finally, the government has committed to establish a new Canada financial crimes agency, which was also announced in the most recent budget. This agency would respond quickly to complex and fast-moving cases of financial crime and is intended to become Canada's lead enforcement agency in this area.
I share my colleague's concern about the serious challenges of money laundering in Canada. However, this bill risks duplicating existing offences in the Criminal Code. For this reason, I oppose this bill. It risks being a less effective option for law enforcement and prosecutors, therefore weakening the administration of justice. The government has shown and continues to show through its actions that it is committed to adopting its strategies and responses to the significant and rapidly evolving crime of money laundering.
I look forward to continuing our efforts to respond to this important societal challenge. I want to thank the member for Simcoe North for bringing this forward.
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The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.
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Madam Speaker, it gives me great pleasure to engage in this debate and to support this bill from my colleague, the member for Simcoe North. My colleague suggested that he is a rookie, but I think a lot of us know that he is one of the rising stars here on the Conservative side. He has brought forward a bill that is perhaps the first step in addressing the issue of money laundering. For me as a British Columbian and a member of Parliament from the west coast, it is especially important, because this is an issue that has now been thoroughly canvassed by the Cullen commission. I will get into that in a moment.
Money laundering is a very serious problem that deserves our serious attention. The amount of money that is laundered is in the many billions of dollars. Perhaps $100 billion a year is being laundered through casinos and real estate. It has a huge impact on Canadians. It has a huge impact on our prosperity and our lifestyles.
Money laundering is, at its very core, criminal. It is an activity firmly rooted in greed that has a complete disregard for the interests of others. Money laundering is deeply destructive to our communities and our families, and is thoroughly implicated in things like gun smuggling, drug trafficking and human trafficking. It goes on and on. Who suffers the most from money laundering? It is our communities and the most vulnerable members of our society, particularly those with addictions, mental health challenges and gambling addictions.
Money laundering is also implicated in much of the gun and gang violence we see across the country, including in my community of Abbotsford. It is an affront to every law-abiding citizen who earns their money honestly, pays their taxes and invests in their communities. It is essential that all of us, whether it is government, law enforcement or regulators, take strong and decisive action to fight this problem.
I mentioned that money laundering is an expensive business for Canadians. Billions of dollars are not being declared and are not being taxed, but are going into criminal activity. There is very little that has been done to address this problem so far.
A significant amount of money that is laundered ends up in our real estate market. I do not know if members understand that, or if Canadians understand that money laundering plays a significant role in the skyrocketing cost of real estate. It is not the only factor but it is one significant factor.
What happens is that these laundered funds end up in real estate and distort real estate prices, especially real estate prices close to major urban markets. Residents then have to seek lower housing costs by moving away from larger cities to communities such as Abbotsford, which in turn strains local real estate markets. Laundering money in Canada is therefore not a benign activity.
What are we supposed to do about it? So far, money laundering has not been addressed in a comprehensive way. The Cullen commission in British Columbia led to a damning report that concluded that billions of dollars per year were being laundered, and that was just in the province of B.C. alone. It called for sweeping changes. The commission found that this dirty money has been laundered through real estate, casinos and the purchase of luxury goods, for example, and Mr. Cullen made 101 recommendations.
To answer my colleague from the NDP, the soft-on-crime NDP, who said this bill is too narrow and too minor to support, I have never heard that argument made in the House before. I have never heard that a significant, narrow Criminal Code amendment could be too minor to support. Had my colleague from Simcoe North broadened this legislation, the NDP would not have supported it; we know that. The NDP is soft on crime. Canadians understand that.
The other thing is that we here on the Conservative side are the official opposition. We are not government. We are not the ones who are supposed to be bringing forward big bills to address the rising crime rate in Canada, especially when it comes to money laundering. That is the role of the Liberal government, which is being propped up by the NDP, who will not bring forward this kind of law or anything close to substantially addressing the issue of money laundering in Canada.
Let us talk about the recommendations the Cullen Commission made. Most of these recommendations are actually directed at the Province of British Columbia. When my NDP colleague says there are all these recommendations and this is not one of them, I can say that my colleague from Simcoe North did his research and his homework.
The bill before us, where individuals who lie to reporting authorities and organizations can go to jail for up to 10 years and can be fined a million dollars, is a big step. It is not a minor step. It is not a narrow step. It is a big step in the right direction. When I said, at the beginning of my remarks, that this is a step, someone has to take the first step. It is usually up to Conservatives to do that and that is what we are doing.
I am really saddened to see that the NDP has decided not to support the legislation. It is not about its merits. It is because it is too narrow. The NDP thinks it is too insignificant so it is going to push it aside and vote no. Canadians have to understand the perspective that the NDP comes from when it comes to addressing crime in Canada.
What are these recommendations that Justice Cullen made? There was a suggestion that there should be a dedicated provincial money laundering intelligence and investigation unit. It said the government should develop anti-money laundering guidance for financial institutions and the money service businesses that are often implicated in money laundering.
He recommended that a corporate beneficial ownership registry should be established, and we see that the Liberal government has now included that beneficial ownership registry in its budget. Has it been implemented, this public beneficial ownership registry? No. In fact, it said it will get it done by the end of 2023. Quite frankly, we could have an election by then. We all know that. By the end of 2023, we could have an election because the marriage between the NDP and the Liberals will likely break up before then. We will be in the middle of divorce proceedings between the two.
Another recommendation is that cryptocurrencies should be regulated because this is the next frontier in which money laundering will take place, if it is not taking place already. There was a recommendation that the threshold for requiring proof of the source of funds for casino transactions conducted in cash should be reduced. There is the suggestion that all cash transactions for the purchase and sale of luxury goods over $10,000 should be reported. There was also a suggestion that professional bodies like lawyers and accountants should be regulated more strictly.
These 101 recommendations, many of which were directed at the Province of British Columbia, provide us with a lot of fodder, a lot of support. At the end of the day, actually having some penalties, like prison time or massive fines, for those who lie to reporting authorities is a good step forward.
I thank my colleague from Simcoe North for bringing forward this very important bill.
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Madam Speaker, I am not questioning the motives of the member for Simcoe North, but I worry that the impact of putting forward such a narrow bill as Bill C-289 only makes it appear like the House of Commons, particularly the Conservatives, want to crack down on money laundering, when in fact this bill would make little or no contribution to the actual fight against money laundering.
The Cullen report on money laundering in B.C., made public last June, made literally dozens of recommendations for effective measures to fight money laundering, but creating a separate criminal offence for providing false or misleading information in money laundering investigations was not one of them.
New Democrats will be opposing this bill because a serious problem like money laundering requires a much more serious and robust action than the one small and probably redundant measure suggested in Bill C-289. I will continue to question why we are here talking about this narrow and probably redundant bill instead of talking about more robust measures to fight money laundering, such as those suggested in the Cullen report.
It is also important to note that the Cullen commission report clearly states that it was the Harper government that made a very significant contribution to the explosion of money laundering in Canada when its 2012 cutbacks to the RCMP caused the closing down of the integrated proceeds of crime units, which it had been operating in each province from 1990 to 2012.
Let me quote the Cullen report directly here. It states, “The RCMP's lack of attention to money laundering has allowed the unchecked growth of money laundering since...2012.” A cynic might even wonder if this Conservative private member's bill on money laundering might have been put forward as a distraction from the role the Harper Conservative government played in allowing the explosion of money laundering through its cutbacks in 2012.
The current Liberal government does not escape criticism either. The Cullen commission reports condemns the current federal anti-money laundering legislation and enforcement in simply one word, ineffective. I will cite just one piece of evidence of how ineffective the current federal efforts are.
In 2019-20, FINTRAC received over 31 million individual reports of suspicious financial transactions, yet it transferred only 2,057 of those reports to law enforcement agencies. When we compare the efforts of other jurisdictions, we find that they have many more reports. If we compare it to the United States, we get about 12 times as many reports of suspicious transactions, but when it comes to actual prosecutions as a result of those reports, we are in the tiny percentages.
The Cullen report did note that there was some progress in British Columbia starting in 2015 when David Eby became the B.C. attorney general. The previous government had very clear warnings from law enforcement and regulators that money laundering had become a massive industry in B.C., especially at casinos. A key change was finally introduced in 2018 by Attorney General Eby. It implemented a provision requiring casino patrons to present proof that the cash used in transactions of $10,000 or more came from legitimate sources, and there was an immediate drop in the amount of transactions over $10,000 in those casinos.
While the Cullen commission report and study were really focused on British Columbia, it still made six major suggestions for improving the federal response to money laundering. I will talk for just a minute about each one of those, and they are: unexplained wealth orders; corporate beneficial ownership registry; a program to fight trade-based money laundering; better and more frequent scrutiny of money service businesses; the requirement for better reporting by chartered professional accountants; and, finally, better regulation of the mortgage industry.
All of those are not things that we normally talk about in our daily lives, so let me talk for a minute about unexplained wealth orders, which has been used very successfully in the United Kingdom. This is where either FINTRAC, or possibly the Canada Revenue Agency, would be given the power to go to court where criminal activity is suspected and require those suspected to produce information about where the money used to purchase assets has come from, was the source of funds was to purchase, for instance, real estate. If it cannot be explained and proven that it came from legal sources, then the court can order that property forfeited to the government. This is essentially what happens in British Columbia through the civil forfeiture process. That is a power we do not have. It is one I would like to see us talking about here tonight, rather than this narrow bill.
The second major recommendation is for a corporate beneficial owner registry. What does that mean in common language? We have numbered corporations, which means we cannot figure out who actually owns them and we cannot figure out their links to other corporations that take place in the darkness of those numbered corporations.
We are told now that legislation is coming. I am interested to hear the Conservatives say that they are now in favour of public access to a corporate beneficial ownership registry, but I have to say that in 2018, when New Democrats put forward this kind of idea, neither the Liberals nor the Conservatives were enthusiastic about proceeding with this. This is a recommendation that has already been made in the fisheries and oceans committee as a way of getting at another problem on the west coast in British Columbia, and that is the problem of not being able to find out who actually owns fishing licences because a great number of them are numbered corporations. I am happy that we appear to have a consensus growing here that we need such a corporate beneficial ownership registry. I would like to see the government come forward very soon with legislation to implement that proposal.
The Cullen commission also pointed out that probably one of the largest sources of money laundering goes completely unmonitored in this country, and that is what is called trade-based money laundering. If I understand it, it is pretty simple. People who make money from illegal criminal activities order and purchase goods from abroad which either do not exist or are not valued at the amount they are paying. That money goes to a company they own offshore and then comes back as clean money as a result of selling products into Canada. Nobody is monitoring this, nobody at all.
The Cullen commission said very clearly that the federal government should set up a program that would combat trade-based money laundering and the power to share information with other governments about suspicious trade transactions, which apparently are simply money laundering. That is another good thing we could be talking about tonight instead of this very narrow bill.
I will briefly name the problem with chartered professional accountants, which is that in a five-year period, only one chartered professional accountant was ever prosecuted for participating in money laundering. I would like people to raise their hands if they think that only happened once in five years in Canada. The Cullen commission pointed out that we need better reporting regulations for chartered professional accountants and we need better monitoring of their activities. It is not casting aspersions on all CPAs. It is saying that the lack of monitoring allows for those who are unscrupulous to take advantage of that and get involved in money laundering.
The fifth one of those is better and more frequent scrutiny of what are called money service businesses. That is where money is transferred back and forth abroad or back and forth around the country. There is a peculiar regulation that allows most of those businesses to avoid scrutiny from FINTRAC by changing their names and reconstituting themselves every two years. The final one is better regulation of the mortgage industry.
Let me close by repeating what I said. Money laundering is a very serious problem and we need serious measures, both in terms of legislation and enforcement, to crack down on money laundering. I do not believe that Bill C-289 is one of those measures. I do not think it makes a major contribution. However, both the Liberal and Conservative governments before and both Liberal and Conservative government policies before have prevented us from taking the actions we need to take on money laundering on a serious basis.
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Madam Speaker, I am really pleased to rise tonight to talk about money laundering, as this is a multi-billion dollar industry in Canada. We require serious legislative and enforcement measures if we are to curb its role in facilitating other types of criminal activity and prevent money laundering from contributing to higher housing prices due to its sheer volume and the frequent use of real estate as a way to launder proceeds of crime.
I have to say that over the past decade, both the current Liberal government and the Conservative government before it have failed to devote adequate resources to the fight against the increase in money laundering and its increasing sophistication. This is becoming an increasing challenge with technological change and with the emergence of cryptocurrencies, which are quite often used for obscuring the sources of funds.
I do not wish tonight to question the motives of the member for Simcoe North for putting forward this particular bill on money laundering—
Some hon. members: Oh, oh!
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Madam Speaker, I am pleased to rise this evening to speak to Bill C‑289, which was introduced by the Conservative member for Simcoe North.
I will start by saying that the Bloc Québécois is in favour of Bill C‑289, which will amend the Criminal Code to make it an offence to give false or misleading information to a financial institution requesting that information in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Right now, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act asks financial institutions to verify their clients' true identity and the source of funds under certain circumstances. Financial institutions must also report transactions they deem suspicious to the government, so the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, can carry out the necessary verifications, prevent laundering of the proceeds of illegal activities and prevent such funds from being used to finance illegal activities, such as terrorism.
The problem is that we know from experience that there is a serious lack of rigour and very little vigilance, at all levels, in the tracking of dirty money. If a bank's client makes a false statement, it is very likely that they will get away with it. There is minimal verification. Since the act of intentionally making a false or incomplete statement is not criminally sanctioned at present, this client has every chance of falling through the cracks. This leaves FINTRAC with incomplete information, and its work becomes less effective. This is how the chain of negligence results in dirty money being laundered in the real economy.
This is a flaw that Bill C-289 will correct. It will not fix everything, of course, but it is another step in the right direction to better uncover money laundering activities.
In May 2022, the Consulate General of Italy in Montreal organized an event to mark the 30th anniversary of “operation clean hands”, a vast anti-mafia and anti-money laundering operation during which, let us not forget, two judges were murdered. Retired Italian judge Roberto Scarpinato came to Montreal to give us a warning. He told us that Canada had become a paradise for the mafia and money laundering and that we as a society had to do something. He encouraged us to develop what he called “antibodies”, to stop being naive, to be more vigilant and not be afraid to enforce our laws to the fullest extent, because money laundering is a scourge in Canada and in Quebec.
According to Transparency International, the amount of money laundered annually in Canada could be between $43 billion and $113 billion. This means that up to $113 billion a year in proceeds of crime, from both here and abroad, is being reintroduced into our economy, allowing criminals to reap the benefits of their crime with impunity and causing economic distortions, such as skyrocketing real estate prices.
British Columbia launched a commission of inquiry into money laundering, the Cullen commission. The Cullen commission may be the most comprehensive effort ever made to understand the phenomenon of money laundering in Canada, its effects, its causes and the best ways to prevent it in future. It submitted its report in June after more than two years of work and hundreds of witness testimonies. The report points the finger at the RCMP and FINTRAC for not taking money laundering seriously enough. It excoriates the banks for looking the other way. In fact, it accuses pretty much everyone of negligence. It also provides examples of what money laundering looks like.
Take the case of Runkai Chen, a Chinese immigrant who arrived in Vancouver in 2006. While reporting an income of about $40,000 a year, he built a real estate empire worth tens of millions of dollars. Mr. Chen was a front man tasked with laundering in Canada the proceeds of corruption in China. He regularly received large transfers from foreign numbered bank accounts and reinvested the money in Canadian real estate.
He made false statements to financial institutions here that, unfortunately, were no longer asking the questions they were supposed to ask. Not one major Canadian bank raised a red flag, not RBC, not CIBC, not the Bank of Montreal. In the end, it was a foreign financial institution that alerted FINTRAC and led to his downfall. That is the type of across-the-board negligence that Judge Scarpinato was referring to when he spoke about the need to develop “antibodies”.
We actually already have a lot of the legal arsenal needed to deal with this problem. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act is a powerful tool. Banks are required to verify the identity of their clients and where the money is coming from. They have the power to freeze funds they deem to be suspicious. They are required to report suspicious transactions, large cash deposits, and international transfers if they have difficulty determining where the money actually came from. All of these requirements exist, but unfortunately, most of them rely heavily on the client acting in good faith and the financial institution being vigilance.
When the government decided to invoke the Emergencies Act in what we believe, need I repeat, was an unjust manner, the Standing Committee on Finance held hearings on the financial aspect of the orders that were made following the emergency proclamation. At these hearings, representatives of the Department of Finance could not say whether the funds frozen by the financial institution had been frozen under the Emergencies Act or under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the law that we are discussing today and that Bill C-289 seeks to strengthen.
From the moment the occupation of downtown Ottawa was declared illegal, the financial transfers used to fund it fell within the scope of these laws. All that was required was vigilance. There was no need to invoke the Emergencies Act. It would have been sufficient to enforce the existing laws, namely the Criminal Code and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
By forcing clients to make true and complete statements to the banks or face criminal penalties, Bill C‑289 addresses the first step, which is to verify the identity of the client and the source of the funds. This could start off a virtuous cycle rather than a vicious one, as the financial institutions themselves would be more diligent about checking. Government organizations would be better informed and more likely to co‑operate with their counterparts abroad. In short, it would help us begin to develop the antibodies needed to seriously address the scourge of money laundering.
That is why I am pleased to reiterate that we will support Bill C‑289.
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Madam Speaker, as I indicated to the member in my question, I appreciate the manner in which the member has presented his private member's bill and his openness to hearing what other members have to say on what is a very important issue.
Money laundering and the false information that is out there have very significant impacts and ramifications, not only here in Canada but around the world. When we think of some of those ramifications, we can talk about the speculation on the costs of housing, which I think a lot of people can appreciate. We can talk about issues such as the financing and funding of terrorist acts that take place around the world. The amount of harm that is caused as a direct result of money laundering is virtually unlimited.
One of the things we need to take into consideration is actions that have already been taken, because there have been some substantial actions that have been taken. The member, for example, just made reference to the ownership registry, and I think having an ownership registry that is publicly searchable is something that is absolutely critical. Within the budget we have made movement toward that, but I would recognize that the Canada Business Corporations Act is something that is going to have to ultimately be changed. In making those modifications, one of the things we need to do as a government is to work with provincial entities to gain some support in taking some of the necessary actions to ensure the ownership registry the member talked about materializes in a way that is as effective as possible.
I recognize the member makes reference to that, and that is a very important aspect. It is something that we have referenced in budget 2022, and we did not stop there. In terms of the importance of our financial markets, and here I talk about money supply and so forth, we have to take into consideration institutions such as FINTRAC. FINTRAC is there to protect the interests of Canadians. It is very close to, if it has not already, establishing a financial intelligence unit, and there was a commitment from the federal budget of just under $90 million to support and advance that.
FINTRAC has an incredible record, and there are ways we can use FINTRAC's record to assist in dealing with and broadening the ways it can possibly help out on money laundering issues and the issues related to false information, which are actually quite rampant. It is something that is not just unique to Canada. It is becoming a larger issue from a global perspective. That is why I posed the question to the member in regard to Canada's role in advocating for global leadership, because in many ways the best way to tackle it, at least in good part, is to get like-minded countries working together.
I know the Deputy Prime Minister and Minister of Finance is very much concerned about that issue and does make efforts to try to ensure there is more of a global approach to dealing with money laundering. We have actually taken steps to establish a new Canada financial crimes agency within the budget, and again it is a move to try to address the issue right up front in a very direct way, which I think people can really appreciate.
When we talk about legislative reviews that are necessary, we have made a commitment to look at how money has been digitized. That is such a critical issue. We heard the leader of the Conservative Party talk about cryptocurrency. Members will recall his commitment to cryptocurrency. I wonder to what degree the leader of the Conservative Party actually took into consideration the possibility of laundering taking place in that digital atmosphere.
Digital money and the markets it is getting into continue to expand, so as a government we have made a commitment to move forward on that issue. The coming of the Internet and the things that take place digitally have expanded more than a hundredfold over the years. The manner in which large sums of money travel the world is quite significant and is having an impact in many different ways on our currency and on issues such as money laundering. It is one of the reasons that legislative review is in fact being taken into consideration.
There is a combination of actions the government has put in place, just from the 2022 budget, and I would encourage the member opposite to maybe meet with representatives, different possible ministers, who all contributed to the budget in dealing with an issue he obviously is very much concerned with.
I would suggest this is not the first budget in which the Government of Canada has expressed an interest in ensuring we are doing whatever we can on the issue of money laundering or people trying to avoid paying their fair share. We have had at least two budgets I can think of offhand in which there was a commitment of literally hundreds of millions of dollars. A commitment was made to have CRA look at ways in which people or corporations are using loopholes and other mechanisms to avoid paying taxes. That is something the government takes very seriously.
When we talk about the issue of laundering, it is important that it is more than one department and more than just one level of government that is ultimately responsible. It even goes beyond Canadian borders. What we have seen over the last number of years is a government that is taking a strong leadership role. It has, in fact, worked with the provinces and looked at what is happening.
In particular, let us look at British Columbia or what is taking place in Toronto and other communities, and the role casinos, for example, might be playing. We understand the depth, at least in good part, of the problem, and our budgetary actions have reflected that understanding.
I suspect that as we continue to move forward in the weeks, months and years ahead, we will see more action from the government in addressing this problem. We can understand and appreciate that it is an issue that is there that affects us all, and we will continue to move forward on it.
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Madam Speaker, yes, that is most certainly the case. This bill would not do that, but it is something we must work on together, and it is a simple rule that we could implement. I look forward to working with all members of the House on simple measures like that.
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Madam Speaker, coming from the banking world, I have to say there are security measures in the financial institutions to watch for money laundering. I remember it very clearly.
The thing I would like some clarification on and would like the hon. member to explain is that in the banking system one bank cannot speak to the other bank, even though we know there are illegal transactions going on. Can we enhance that, so they have the ability to speak to one another?
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Madam Speaker, if I had the benefit of being in government and significant legislative resources to bring forward additional measures, I most certainly would have done so, but the truth is there actually is not an administrative penalty for it right now. The beneficial ownership registry does not exist today, so this is a criminal penalty for those who lie about their identity or the corporate ownership structure of the name under which they are opening an account.
We need a serious penalty for a serious crime, and it needs to be criminal and not administrative. That is what we will see in the beneficial ownership registry. We need a criminal penalty for this, and we must take a step to say no to global criminals.
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Madam Speaker, I listened with care to the member's introduction of his bill, and I guess I have a fundamental question about the bill. There are lots of very robust measures that have been suggested for tackling money laundering, and it seems to me that all this bill does is take something that is an administrative penalty now and make it a criminal penalty. It seems like a very small measure given the very robust recommendations we have had from the Cullen commission about the things we need to do to combat money laundering.
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