Tuesday 20 February 2001

Remedies for Organized Crime and Other Unlawful Activities Act, 2000,
Bill 155, Mr Flaherty / Loi de 2000 sur les recours pour crime organisé
et autres activités illégales
, projet de loi 155, M. Flaherty

Ministry of the Attorney General
Honourable David Young, Attorney General
Mr Jeffrey Simser, project director, legal services division

Canadian Civil Liberties Association
Mr Alan Borovoy

Office for Victims of Crime
Mr Scott Newark

Mr Hillel Gudes; Mr Andy Réti

Freedom Party of Ontario
Mr Paul McKeever

Ms Karen Selick

Canadian Bankers Association
Mr Gene McLean

Toronto Police Service
Mr Julian Fantino

Nathanson Centre for the Study of Organized Crime and Corruption,
Osgoode Hall Law School

Dr Margaret Beare

Advocates' Society
Mr Anthony Moustacalis

Kroll Lindquist Avey
Mr Roddy Allan


Chair / Présidente
Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)

Vice-Chair / Vice-Président

Mr Carl DeFaria (Mississauga East / -Est PC)

Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)
Mr Michael Bryant (St Paul's L)
Mr Carl DeFaria (Mississauga East / -Est PC)
Mrs Brenda Elliott (Guelph-Wellington PC)
Mr Garry J. Guzzo (Ottawa West-Nepean / Ottawa-Ouest-Nepean PC)
Mr Peter Kormos (Niagara Centre / -Centre ND)
Mrs Lyn McLeod (Thunder Bay-Atikokan L)
Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)

Substitutions / Membres remplaçants

Mr Garfield Dunlop (Simcoe North / -Nord PC)
Mr Raminder Gill (Bramalea-Gore-Malton-Springdale PC)
Mr John Hastings (Etobicoke North / -Nord PC)
Mr David Tilson (Dufferin-Peel-Wellington-Grey PC)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Mr Avrum Fenson, research officer, Research and Information Services

The committee met at 1005 in room 151.


Consideration of Bill 155, An Act to provide civil remedies for organized crime and other unlawful activities / Projet de loi 155, Loi prévoyant des recours civils pour crime organisé et autres activités illégales.

The Chair (Ms Marilyn Mushinski): I'm going to call the meeting to order. There are members outside still but we are on a very tight schedule today.


The Chair: Good morning, ladies and gentlemen. This is a meeting of the standing committee on justice and social policy to consider Bill 155, An Act to provide civil remedies for organized crime and other unlawful activities. We're going to start the day with the Honourable David Young, Attorney General. You have 10 minutes, Mr Young.

Hon David Young (Attorney General, minister responsible for native affairs): Thank you, Madam Chair. I do appreciate the opportunity to speak about the Remedies for Organized Crime and Other Unlawful Activities Act.

As most of you know, this bill was introduced by my predecessor, the Honourable Jim Flaherty, who did a great deal of groundwork on this bill when he was the Attorney General of this province.

Our government introduced this bill to protect Ontario's communities, to protect the people of Ontario, and to assist victims. The threat of unlawful activity to the security of the residents of this province can take many forms.

We are all aware of the violence alleged to be perpetrated by organized crime in other provinces and in other countries. What we don't tend to see and what we don't tend to hear about are the unseen harms caused by this kind of activity. Other jurisdictions acknowledge this threat and other jurisdictions have moved to address it. In this province, we need a made-in-Ontario solution that will give us the means to fight unlawful activity effectively.

A great deal of research was conducted before the drafting of Bill 155. Experts on organized crime and civil asset forfeiture were consulted. These are experts that came from Ontario and elsewhere in Canada, as well as other jurisdictions, including the United States, Ireland and South Africa.

We learned that civil asset forfeiture works. As Detective Chief Superintendent Felix McKenna of Ireland's Criminal Assets Bureau told us, a significant number of high-level criminals left that country as a result of the bureau's efforts in this area.

Madam Chair, we have put forward a made-in-Ontario solution to take the profit out of crime. What we have done, plain and simple, is to clarify the law of property in Ontario. We have created another tool that can be exercised under our constitutional power of civil law.

I look forward to the input of this committee and I look forward to the input of the public. My hope is that the comments and advice that are provided over the next two days will help us to refine and strengthen this bill so that it can be an effective tool.

The aim of the proposed Remedies for Organized Crime and Other Unlawful Activities Act is to take the profit out of crime and to protect victims. Specifically, it would enable the province to ask the courts to freeze, seize and ultimately forfeit to the crown the proceeds of unlawful activity and instruments likely to be used in unlawful activity.

It would also allow the province to launch civil actions in court against two or more people who conspire to engage in unlawful activities, and it would create a special fund, a fund that would consist of the proceeds from civil forfeitures, from which people directly victimized by these unlawful activities could be compensated.

Unlawful activity is indiscriminate. It hurts every resident of this province and it hurts our economy. This bill would attack that activity and, more importantly, it would help victims.

Ontario is open for business, but not the business of organized crime.

We can't be naïve about this problem. Organized crime is picking the pockets of everyone in Ontario. A federal study estimated that organized economic crime costs Ontario between $5 billion and $9 billion each and every year. To put that into perspective, that is roughly equivalent to the value of Canada's exports to Japan. As the most populous province in this country and the economic engine of this country, it is only reasonable to assume that Ontarians bear the largest share of the economic cost of that unlawful activity.


Michel Auger, the courageous Quebec crime reporter who narrowly survived an attempt on his life last year, has said that organized criminals stay out of the United States and flock to Canada because of inefficient and ineffective laws in this country. While our proposed legislation is civil law, Ontario has also asked the federal government to do what it can in the criminal field. We have asked Ottawa to amend the Criminal Code to: broaden the definition of "criminal organization"; prohibit recruitment and participation in criminal organizations; and attach consequences to the wearing of badges and other manifestations of membership in criminal organizations. We'd like them to amend the Criminal Code to expand police powers to detain and search suspected members of criminal organizations and to establish a mandatory minimum sentence for organized criminal activity to help fight organized crime and biker gangs.

Our government believes that we have a responsibility to act in the best interests of the people of this province. It is clear that action can be taken against unlawful activity that falls under provincial jurisdiction. Ontario clearly needs new and innovative tools to fight unlawful activity and to help victims. Bill 155 is our government's response.

While the bill would give us more effective tools to fight unlawful activity, the rights of individuals have to be and will be protected. Safeguards to ensure due process and to protect the rights of people who legitimately and responsibly own their property are part of the bill.

The standard of proof that would be used in a civil forfeiture action would be the same as now exists for all civil cases: it will be the balance of probabilities. It would have to be proven in court that the property in question was a proceed of unlawful activity before it could be frozen, before it could be seized or before it could be forfeited.

I also want to stress that under this bill the burden of proof would remain with the province. The province would be required to prove its case in court. The burden of proof is not reversed. In addition, Bill 155 would also balance the privacy of personal information with the need of investigators to gather information for a civil asset forfeiture proceeding.

It has always been our commitment to protect the privacy rights of Ontarians. I'm pleased to say today that I am reaffirming our government's commitment to protect personal health information. We will propose an amendment that will clearly state that personal health information protected by Bill 159 cannot flow to the Attorney General under Bill 155 in the absence of a court proceeding or a summons.

We continue to consult on privacy matters related to this bill. I've had an opportunity to speak to Dr Ann Cavoukian, the Information and Privacy Commissioner, and I will be meeting with her over the next short while. I look forward to her advice; I look forward to receiving the advice of this committee.

The court, under this proposed piece of legislation, would have different remedies available to it. For example, the court may choose to award damages equal to the losses experienced by the public, or it could issue an injunction to prevent future unlawful activity. This provision would provide the province with a powerful tool to prevent further victimization.

I think it's important to remember that our key objective through this legislation is to prevent further victimization where people are exposed. We want to ensure that victims will have an opportunity to be compensated for their loss.

The feature that makes this bill truly unique is the compensation fund for victims. If there is unclaimed money in the fund, participating police services, government ministries and others would be able to use that money to fund programs to help victims or to prevent further victimization.

In conclusion, our goal is to take the profit out of crime. And we'll help victims of unlawful activity if this bill is passed. We are developing a comprehensive organized crime strategy. We made a budget commitment last May of $4 million for the strategic deployment of specialized police forces and dedicated legal resources to focus on organized crime. This funding was split between my ministry and that of the Solicitor General.

Ontario is committed to doing what it can under the provincial jurisdiction that it has. Bill 155 is one component of our strategy, and if it's passed, it would allow the province to establish a strike force of investigators, civil lawyers and forensic accountants. The strike force would enable us to achieve our goals without creating another level of bureaucracy.

Ladies and gentlemen, I'm proud that Ontario is the first jurisdiction in this country to develop a new approach that would stop further victimization and help existing victims. The Remedies for Organized Crime and Other Unlawful Activities Act, if passed, would disrupt and disable organizations that victimize Ontarians. I encourage all members to support this bill so that we can work together to make Ontario a safer place to live, a safer place to work and a safer place to do business.

I thank the members of the standing committee for their time today and I look forward to the discussions you'll have over the next two days on this very important piece of legislation.

The Chair: Thank you, Minister. We'll now turn to the official opposition for a 10-minute statement, with questions if there's time.

Mr Michael Bryant (St Paul's): Let me say at the outset that Dalton McGuinty and Ontario Liberals want to provide law enforcement officials with effective and legal tools to crack down on organized crime. Ontario has lost billions of dollars to organized crime under Mike Harris's watch, so we need constructive measures to reverse this embarrassing trend.

The stated purpose of this bill was to make Ontario somehow not open for business to organized crime, yet in fact since the bill's introduction it would seem that organized crime has been flocking to the province. Biker gangs seem not to be shaking in their boots when faced with this paper tiger. I'm particularly concerned that the Harris government, instead of investing the necessary resources into enforcing the law already on the books, is engaging in another public relations stunt to fool Ontarians into thinking that they're doing something about organized crime. Even the National Post editorial board has trashed this bill as nothing more than, in their words, "a headline grabber."

We have a law that permits the seizure of mobsters' assets. We need to enforce the law on the books. Instead, what we're seeing today is the government trying to steer its resources away from the criminal courts and toward the civil courts, which are already totally overburdened. There is no reciprocal assistance to the civil courts that would deal with prosecutions through this new bill. But of course that would assume that the bill is actually going to have the necessary resources to be used.

And on that front we heard today, yet again, of a commitment to inject $4 million, I believe it was, into police strike forces. Well, I've got news for the people of Ontario: this is another ruse. This is not new money; this is money that was first committed in the May 2000 budget. This is not new money; this is a reannouncement of money that was put in the budget nearly a year ago.

I'm concerned, furthermore, that the Harris government's approach to organized crime has involved conferences, pamphlets, several press conferences, and yet at the end of the day we don't have any investment in a real crackdown on organized crime. That's an enormous waste of taxpayers' money. The holding of a summit on organized crime in August 2000, after the Attorney General had attended four other summits on this issue, in Vancouver, New Jersey, Delaware and Washington-this bill might be renamed not the current title of the bill but rather "A Bill to Forfeit Taxpayers' Money for a PR Stunt."


Lastly, I want to say something about the announcement that was made today. Of course, it goes without saying that amendments to bills at the committee stage are always welcome, but let's put this in context. The Attorney General of Ontario stood up in the House time and time again and lectured opposition MPPs that they had nothing to worry about with respect to the seizure of Ontarians' private health information by the Ministry of the Attorney General. "Don't worry; all is in hand with this bill," said the Attorney General. He had a briefing and thought that this briefing was going to somehow create a smokescreen that would fool everybody into thinking that all was right with this bill. Yet, after all of that, after all of those cries of "Trust me, the bill is right," now we hear from the Ontario Attorney General, "Well, as a matter of fact, the bill wasn't right and you were right, Ontario Liberals, that it's wrong for Ontarians' private health information to be seized by the ministry without some element of due process hovering over it."

This is a major concession by this government, albeit it's not being brought in too late; it is before the bill is being passed. We're going to be taking a close look at this bill, looking forward to hearing from the submissions. I would just close by saying that I hope the legacy of Princeton's prince of paper tigers is not a series of bills which have no effect in this province. I look forward to Minister Young bringing forth an approach that doesn't just talk about crime but does something about organized crime in the province of Ontario.

The Chair: Thank you, Mr Bryant. You have a couple of minutes for questions, if you would like.


The Chair: OK, then we'll turn to Mr Kormos. You have 10 minutes.

Mr Peter Kormos (Niagara Centre): First, to Mr Young, congratulations. This is your first, I suppose, legislative function as Attorney General. I do wish you well during your term as Attorney General. Look, I'm not doubting the personal commitment of you or any other member of this assembly to want to confront criminal activity and cut it off at the knees. I have some concern with the partisan colouring of this and other so-called law-and-order initiatives.

Forgive me if I'm overly suspicious at times when I see your predecessor, the Solicitor General and the Premier, playing the law-and-order card in a very partisan way. Perhaps it's just my cynicism that drives me to see it as partisan-driven. Perhaps the people of Ontario look at it from a totally different perspective, a far more benign one. But I'm troubled. I've got to tell you, sir, I'm troubled when I see the law-and-order card, the fear-of-crime card, being played.

Having said that, nobody doubts the need to confront crime. You make note, as I heard you in your press conference this morning, about wanting to prohibit the wearing of badges, I suppose, insignia that presumes membership in some sort of criminal group or another. Some folks where I come from would think that blue pinstripe suits would fall into that same category. I trust you don't advocate abolishing those as well.

I've got some real concerns about the utilization of the civil test, the mere balance of probabilities. Again, I and New Democrats will support you or any other Attorney General in any effort to fight crime. Our concern-we hope we have a chance to address that during the course of this committee process-is that the civil test of balance of probabilities is such that it has the capacity to embrace or encompass people who aren't in fact criminals, whereas, as you know, in the criminal law the test is proof beyond a reasonable doubt. In fact you, and more importantly your predecessor, have talked about how that's too high a standard, that's going to make it too hard. But, quite frankly, that test or that standard for criminal culpability is one that's a very important part of our whole social makeup and our history.

We have concern about the failure of the legislation to understand, when it speaks about relying upon convictions as-perhaps I've phrased this wrong-prima facie evidence, that there are places in the world outside Canada where the legal system does not have the same standard of proof, where people can be convicted of criminal convictions with sometimes the flimsiest and most capricious of evidence and, quite frankly, where the criminal courts are used as a means of political persecution.

I want very much to hear from you and witnesses who appear before this committee about the risk that's entailed with the reliance upon a conviction, be it in Canada or outside of Canada, in relying upon an outside-of-Canada conviction which may be based on a corrupt criminal justice system-"justice" would be oxymoronic in that regard-or upon a system where the criminal courts are used for political persecution, basically to get people or to force them out of the country or to punish them in a way that couldn't be effected through other means. I have real concerns about the impact of this in view of the incredible diversity of the Canadian population and the fact that people find refuge in Canada from some of the most oppressive and persecutorial regimes in the world, where I dare say yes, the criminal courts are used for the purpose of political persecution.

Real concerns about your comments this morning on health records: We haven't got the amendment; I trust it's forthcoming. We haven't got the briefing books yet; I'm sure those are forthcoming. Folks out there are incredibly concerned about the state getting the powers you described, and I want to hear more about summonsing, because I was a little confused with this. You can say, "Well, of course you were," but I was a little confused about your use of the word "summons." Some of the press gallery asked you about that as well. You didn't have a chance to elaborate. You'll have a chance here, because I do want to hear about that.

The public is incredibly concerned about the prospect of the state, its police, its Ministry of the Solicitor General and its Ministry of the Attorney General accessing health care records. One would hope that this government, as any government, would be doing everything it could to ensure the integrity and security of health care records, rather than open them up to yet more opportunities. I, quite frankly, have concerns about the rationale you gave for that this morning. I'm not sure I buy it, but I'm prepared to listen. I'm prepared to listen carefully.

Niagara region, where I come from, is one of the regions-and I don't want to create the misimpression that somehow the Niagara region is rife with criminal activity or organized crime activity, but it's an area that's a border community, is part of the Golden Horseshoe-that has certainly been impacted, as we read in the papers at least, by the inflow of biker gangs, among others.

I want to refer you to the struggle that the Niagara Regional Police force and, I believe, police forces across the province are having in a time when the downloading on to the municipalities is showing its colours, is having its impact: the incredible crisis the city of Toronto faces in terms of budgeting and similar crises down in Niagara region and, I trust, across the province. Policing is a labour-intensive activity. Good cops deserve decent pay-I have no quarrel with that-and good cops are prepared across this province, certainly in the Niagara region, to go out there and investigate, using all of the possible avenues, be it surveillance, be it following paper trails, be it infiltration, but they need the resources to do that.

It seems to me that the first line of attack, and, again, I know about the announcement that you reannounced this morning, because you referred to it from your last budget, leaving the impression-is it going to be announced again come April or May? Cops and police forces need the resources to conduct what can be very expensive, very time-consuming investigations. They're prepared to do it. I say they need the support of this government, because municipalities are cash-strapped, increasingly so. They need the support of this government to enable them to do that. Quite frankly, the numbers you spoke of may well not be adequate, and we haven't seen any sort of plan or strategy from this government about targeting particular criminal activities or particular areas in the province that may be hardest hit by criminal activities.

Similarly, the courts need the resources, crown attorneys offices and the court system in general, to handle what can become increasingly complex trials that last longer and longer, and to do it in a timely way. Earlier today, you talked about the huge time gap between investigation and prosecution. That should be of concern. Askov and Melo are not that distant in the past so as to be out of the realm of serious concern by you as Attorney General, sir.


Do we support your efforts or anybody's efforts to suppress organized crime? You bet your boots we do. But are we going to support what amounts to your partisan grandstanding? Are we going to support what amounts to yet another announcement, trying to appear tough on law and order while all hell is breaking loose out there and families and individuals are being impacted by crime on a daily basis? Are we going to support an attack on the integrity of health care records? I think not, Mr Attorney General.

I'm eager to work with you in a spirit of co-operation and non-partisanship. I'm like that. I want our relationship-you, as the new Attorney General-to start off on a good, firm footing. But, please, focus your attention on the areas that are going to be most effective rather than the areas that are simply going to grab the biggest and best headlines.

The Chair: We'll now turn to presentations from the Ministry of the Attorney General. If you would like to come forward and give us your name, please. You have an hour. Hopefully, you will leave us some time for questions.

Mr Jeffrey Simser: I'll do my very best. We have 25 clauses.

My name is Jeffrey Simser. I am a lawyer with the Ministry of the Attorney General. This morning I am going to give you a very brief context for the bill. I'm going to take you through the basic architecture of the six parts of the bill and then I'll turn to the various clauses in the bill. I am mindful that this is a bill and not an act, and I will endeavour not to misspeak and assume otherwise in the course of my comments.

On August 2 and 3, the government held a summit entitled Taking the Profit Out of Crime: The Ontario Government's Summit on New Approaches to Fighting Organized Crime. Following that summit, the government issued a report entitled Lessons Learned, and among the recommendations of that report was one which suggested that Ontario could consider civil asset forfeiture as an option.

Bill 155, which is before this committee, is, without question, unique. It is the first of its kind in Canada. We did, however, learn from a number of other jurisdictions that are active in this area. The United States has had one form or another of civil asset forfeiture for over 200 years. Australia passed a number of civil asset forfeiture provisions starting in 1990, and a 1999 Australian Law Reform Commission report recommended an expansion in this area.

Following the deaths of a police officer and a journalist in 1996, the Irish government enacted civil proceeds-of-crime legislation. In 1998, South Africa passed a number of legislative proposals to address organized crime, including civil asset forfeiture. Finally, in June 2000, Prime Minister Blair endorsed a policy proposal in this area for the United Kingdom.

We move on now to the architecture of Bill 155. Bill 155 consists of six parts.

Part I is a purposes section. This section is designed to guide the courts and to help them understand the intent of the Legislature. The first purpose is to compensate victims. Bill 155 is unique in this respect: the proceeds of a Bill 155 action will be preserved and made available to the victims of unlawful activity giving rise to a proceeding.

The second purpose is essentially to regulate property. If someone has property that derives its origin in unlawful activity, Bill 155 states that they will be denied title to that property.

The third purpose is to protect public safety; that is, to prevent certain property from being used to engage in certain unlawful activities.

The final purpose is to prevent injury to the public that may arise from conspiracies to engage in unlawful activities.

Part II permits the Attorney General of Ontario to launch a civil proceeding in the Superior Court of Justice to seek an order to forfeit property to the crown in right of Ontario if the court finds that the property is the proceeds of unlawful activity.

I want to talk just very briefly about what that means and, more importantly, about what that does not mean.

All of the civil remedies in Bill 155 require court approval to be implemented. There are no police powers and there are no administrative seizure powers bestowed on the Attorney General or anyone else to seize or freeze or forfeit property. The court must approve every step.

Part III addresses instruments of unlawful activity. The Attorney General may launch a civil proceeding in the Superior Court of Justice to seek an order to forfeit property to the crown in right of Ontario if the court finds that the property is an instrument of unlawful activity.

Part IV creates civil remedies to address conspiracies. Bill 155 amends and extends the common law tort of conspiracy to make it available to the Attorney General, who can bring a proceeding in the public interest.

Part V of the bill deals with several matters, including proof of facts in a proceeding and the collection and disclosure of information.

Part VI of the bill makes amendments to the Freedom of Information and Protection of Privacy Act and the Municipal Freedom of Information and Protection of Privacy Act.

We now go to clause-by-clause analysis of the bill. There are 25 clauses in the bill, but I'm going to focus particularly on part II of the bill because, as you will see, a number of the provisions in parts III and IV replicate sections in part II. What I propose to do when I get to III and IV is only highlight the sections that are different.

Section 1, as I've noted, is the purposes section of the bill. If there is any ambiguity or uncertainty, we expect that the courts would make reference to this section in aid of interpretation of the bill. Section 1 says that the purpose of this act is to provide civil remedies that will assist in:

"(a) compensating persons who suffer pecuniary or non-pecuniary losses as a result of unlawful activities;

"(b) preventing persons who engage in unlawful activities and others from keeping property that was acquired as a result of unlawful activities;

"(c) preventing property from being used to engage in certain unlawful activities; and

"(d) preventing injury to the public that may result from conspiracies to engage in unlawful activities."

Part II of the bill, as I've noted, deals with proceeds. We start with section 2, which has a number of definitions, the first of which is "legitimate owner." This is a very important safeguard in the bill. As you'll see in subsection 3(3) of the bill, it allows someone to assert and requires the court to protect the interests of a legitimate owner of property. The definition reads:

"`legitimate owner' means, with respect to property that is proceeds of unlawful activity, a person who did not, directly or indirectly, acquire the property as a result of unlawful activity committed by the person, and who,

"(a) was the rightful owner of the property before the unlawful activity occurred and was deprived of possession or control of the property by means of the unlawful activity,

"(b) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity, or

"(c) acquired the property from a person mentioned in clause (a) or (b)" above.

Section 2 goes on to define "proceeds of unlawful activity." It means "property acquired, directly or indirectly, in whole or in part, as a result of unlawful activity, whether the property was acquired before or after this part came into force, but does not include money paid under a contract to which section 2 of the Victims' Right to Proceeds of Crime Act, 1994 applies."

I would note for the committee that there is a different bill in the House, Bill 168, and if Bill 168 were to pass, it would replace the Victims' Right to Proceeds of Crime Act. It has in it a consequential amendment, so it's clear that this section applies there as well.

"Property," as you will see, has a very broad definition. It means "real or personal property, and includes any interest in property."

"`Unlawful activity' means an act or omission that,

"(a) is an offence under an act of Canada, Ontario or another province or territory of Canada, or

"(b) is an offence under an act of a jurisdiction outside Canada, if a similar act or omission would be an offence under an act of Canada or Ontario if it were committed in Ontario,

"whether the act or omission occurred before or after this part came into force."

You'll see with that definition that it carries through all of the three operative parts of this bill. The important thing is that if there is something that is an offshore offence, it must also be an offence in Ontario. If it's not, there's no right of action for us under this bill.

Subsection 3(1) is the heart of part II and it allows for a forfeiture order. It says:

"In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3) and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the crown in right of Ontario if the court finds that the property is proceeds of unlawful activity."

Subsection 3(2) allows the proceeding to be commenced by action or application.


Subsection 3(3), as I noted earlier, is the protection afforded to legitimate owners. It says, "If the court finds that property is proceeds of unlawful activity," which is again a precondition for an action under this part, "and a party to the proceedings proves that he, she or it is a legitimate owner of the property, the court, except where it would clearly not be in the interests of justice, shall make such order as it considers necessary to protect the legitimate owner's interest in the property."

So again, there's no reverse onus here. Before anyone is required to assert a legitimate owner defence, the Attorney General must make its case before the Superior Court of Justice.

Subsection 3(4) gives the court flexibility to protect the interests of a legitimate owner. It states, "Without limiting the generality of subsection (3), an order made under subsection (3) may,

"(a) sever or partition any interest in the property or require any interest in the property to be sold or otherwise disposed of, to protect the legitimate owner's interest in the property; or

"(b) provide that the crown in right of Ontario takes the property subject to the interest of the legitimate owner."

Subsection (5) has a limitation period. It says, "A proceeding under this section shall not be commenced after the 15th anniversary of the date proceeds of unlawful activity were first acquired as a result of the unlawful activity that is alleged to have resulted in the acquisition of the property that is the subject of the proceeding."

Section 4 deals with interlocutory orders that the court may make in advance of a final ruling under subsection 3(1). It states, "On a motion by the Attorney General in a proceeding or intended proceeding under section 3, the Superior Court of Justice may make any or all of the following interlocutory orders for the preservation of any property that is the subject of the proceeding." You'll see that the court has a range of orders, from intrusive to very unintrusive, that it may make, and the object of the order must be to preserve the property. The orders are:

"1. An order restraining the disposition of the property.

"2. An order for the possession, delivery or safekeeping of the property.

"3. An order appointing a receiver or a receiver and manager for the property.

"4. An order giving the crown in right of Ontario a lien for an amount fixed by the court on the property or on other property specified in the order to secure performance of an obligation imposed by another order made under this subsection.

"5. An order that notice of the proceeding or of any order made under this subsection be registered in a land registry office against the property or any other property specified in the order.

"6. Any other order for the preservation of the property that the court considers just."

Subsection 4(2) states, "Except where it would clearly not be in the interests of justice, the court shall make an order under subsection (1) for the preservation of the property if the court is satisfied that there are reasonable grounds to believe that the property is proceeds of unlawful activity."

Subsection (3) allows that order to be made under subsection (1) without notice, but not for a period exceeding 10 days. What you'll see with subsections (3), (4) and (5) is that those track the existing rules of civil procedure that exist now in the province for all litigation.

Subsection (4) does permit an extension: "If an order under subsection (1) is made on a motion without notice, a motion to extend the order may be made only on notice to every party affected by the order, unless the court is satisfied that because a party has been evading service or because there are other exceptional circumstances, the order ought to be extended without notice to the party."

So the general rule is that if there is an interlocutory proceeding and it goes ex parte without notice, it will be for a very short period.

Subsection (5) allows extension for a further period not exceeding 10 days.

Subsection 4(6)-perhaps I won't read all of these-makes technical amendments to make operative the possibility of a lien being ordered under subsection 4(1), paragraph 4.

Section 5 deals with legal expenses. It states, "Subject to regulations made under this act, a person who claims an interest in property that is subject to an interlocutory order made under section 4 may make a motion to the Superior Court of Justice for an order directing that reasonable legal expenses incurred by the person be paid out of the property."

Subsection 5(2) has some restrictions on the order:

"The court may make an order under subsection (1) only if it finds that,

"(a) the moving party has, in the motion,

"(i) disclosed all interests in property held by the moving party, and

"(ii) disclosed all other interests in property that, in the opinion of the court, other persons associated with the moving party should reasonably be expected to contribute to the payment of legal expenses;

"(b) the interests in property referred to in clause (a) that are not subject to the interlocutory order made under section 4 are not sufficient to cover the legal expenses sought in the motion."

Section 6 is rather technical but it's very important for the operation of this part and of the whole bill. The essence of section 6, if I may, in plain language, is that if there is a successful proceeding under Bill 155, rather than the proceeds of that proceeding going into the consolidated revenue fund-in other words, into the general revenues of the government-they will go into a special purpose account. They will be segregated and they will be made available for the purposes talked about in subsection (3).

Perhaps I'll just go there to focus on that. You'll see that "the Minister of Finance may make payments out of the account for the following purposes."

The first and most important is,

"1. To compensate persons who suffer pecuniary or non-pecuniary losses, including losses recoverable under part V of the Family Law Act, as a result of the unlawful activity."


"2. To assist victims of unlawful activities or to prevent unlawful activities that result in victimization.

"3. To compensate the crown in right of Ontario for pecuniary losses suffered as a result of the unlawful activity, including,

"i. expenses incurred in respect of any proceeding under this part that relates to the unlawful activity, and

"ii. expenses incurred in remedying the effects of the unlawful activity.

"4. To compensate a municipal corporation or public body that belongs to a class prescribed by the regulations made under this act for pecuniary losses that were suffered as a result of the unlawful activity and that are expenses incurred in remedying the effects of the unlawful activity.

"5. If, according to the criteria prescribed by the regulations made under this act, the amount of money in the account is more than is required for the purposes referred to in paragraphs 1 to 4, such other purposes as are prescribed by the regulations."

So now we'll go through the other parts. As I noted earlier, what I'm going to do is try and focus on the sections that are distinct, although I welcome questions if I've glossed over something that anyone isn't quite comfortable with.

Subsection 7(1), again, is definitions. The first defines what an "instrument of unlawful activity" is. It means "property that is likely to be used to engage in unlawful activity that, in turn, would be likely to or is intended to result in the acquisition of other property or in serious bodily harm to any person." So you'll see that instruments have a fairly limited definition here.

"Property" has the same definition.

You'll note on the owner defence that it's different here. Here we have a "responsible owner"; in part II we had a "legitimate owner." The reason for the difference is that we're dealing with very different kinds of potential proceedings here.

"`Responsible owner' means, with respect to property that is an instrument of unlawful activity, a person with an interest in the property who has done all that can reasonably be done to prevent the property from being used to engage in unlawful activity, including,

"(a) promptly notifying appropriate law enforcement agencies whenever the person knows or ought to know that the property has been or is likely to be used to engage in unlawful activity, and

"(b) refusing or withdrawing any permission that the person has authority to give and that the person knows or ought to know has facilitated or is likely to facilitate the property being used to engage in unlawful activity."

"Unlawful activity" itself, again, is a very similar definition.

Subsection 7(2) is a different section; it doesn't appear in part II. Remember that in this part, everything must be forward-looking. We have to prove that it's likely to be used. What subsection 7(2) states is, "For the purpose of the definition of `instrument of unlawful activity' in subsection (1), proof that property was used to engage in unlawful activity that, in turn, resulted in the acquisition of other property or in serious bodily harm to any person is proof, in the absence of evidence to the contrary, that the property is likely to be used to be engage in unlawful activity that, in turn, would be likely to result in the acquisition of other property or in serious bodily harm to any person."

Subsection 8(1) is the heart of this section, and it's similar to its counterpart in section 3. "In a proceeding commenced by the Attorney General, the Superior Court of Justice shall, subject to subsection (3)," which protects responsible owners, "and except where it would clearly not be in the interests of justice, make an order forfeiting property that is in Ontario to the crown in right of Ontario if the court finds that the property is an instrument of unlawful activity."

Again, subsections 8(2), (3) and (4) operate substantially in the same form as they did in section 3 earlier.

Subsection (5) is different, though. That says there is no limitation period. Every action under this part is prospective. We must show future use. So we did not feel that a limitation period had, in that context, any utility.


Section 9, which deals with interlocutory orders, is the same as the approach taken in the previous part. I don't propose to go through it unless there are questions. We have precisely the same kinds of remedies that are there.

Section 10 deals with legal expenses in a similar way. Section 11 deals with the special purpose account in a similar way. The only thing I would note there is that if you want to qualify as a victim for compensation, the property must be of such a nature that it was used in the past, because that establishes the nexus to your claim.

Part IV deals with conspiracies that injure the public. This is a slightly different kind of drafting, because we're dealing with a different kind of proceeding. So section 12 has definitions. The first and very important definition is "injury to the public." That includes,

"(a) any unreasonable interference with the public's interest in the enjoyment of property,

"(b) any unreasonable interference with the public's interest in questions of health, safety, comfort or convenience, and

"(c) any expenses or increased expenses incurred by the public, including any expenses or increased expenses incurred by the crown in right of Ontario, a municipal corporation or a public body."

"Property" has the same definition. "Public," you may note, "includes any class of the public." "Unlawful activity" is defined as it was similarly in the previous sections.

The heart of this part is subsection 13(1), and it states,

"13(1) In a proceeding commenced by the Attorney General, the Superior Court of Justice may make any order that the court considers just if it finds that,

"(a) two or more persons conspired to engage in unlawful activity;

"(b) one or more of the parties to the conspiracy knew or ought to have known that the unlawful activity would be likely to result in injury to the public; and

"(c) injury to the public has resulted from or would be likely to result from the unlawful activity."

Again, these kinds of proceedings can be brought by action or application.

Subsection 13(3) is a little different. It has a special provision requiring that the Attorney General give notice of the proceeding, and I'll explain that in a minute in the context of subsection 13(5).

Subsection 13(4) defines the orders that a court may make. It says,

"(4) Without limiting the generality of subsection (1), an order made under subsection (1) may,

"(a) for the purpose of preventing or reducing the risk of injury to the public, require any person to do or refrain from doing anything specified in the order; or

"(b) require a party to the conspiracy referred to in clause (1)(a) to pay damages to the crown in right of Ontario for any injury to the public resulting from the unlawful activity."

Now, subsection 13(5) provides a slight wrinkle here. What this section 13 does is it amends and changes the commonlaw tort of conspiracy that exists now for private plaintiffs. So subsection 13(3) and subsection 13(5) were specifically designed in the architecture of this bill to deal with potential conflicts between a claim in a proceeding by the Attorney General on behalf of the public and a private litigant's claim. Subsection 13(5) says,

"(5) Despite subsections (1) and (4), no order shall be made requiring the payment of damages to the crown in right of Ontario if,

"(a) another person gives the court written notice that the other person claims a right to those damages and has commenced or intends to commence a separate proceeding seeking payment, by a defendant to the proceeding under this section, of those damages; and

"(b) the court is satisfied that the claim referred to in clause (a) is not frivolous or vexatious."

Subsection 13(6)-and this operates similar to a provision I talked about earlier-has a presumption of risk of injury to the public, and it states,

"(6) For the purpose of clause (4)(a), proof that, during the period that began five years before the day the proceeding was commenced, a defendant engaged in or conspired to engage in unlawful activity on at least two occasions and, in each case, injury to the public resulted from the unlawful activity, is proof, in the absence of evidence to the contrary, that similar unlawful activity would create a risk of injury to the public."

The limitation period is similar here to the one that was in part II, which is the 15th anniversary.

There are interlocutory orders. What you'll see here is that they're not listed in the same way that they were previously, but that's simply because we're dealing with a different kind of proceeding.

"14(1) On motion by the Attorney General in a proceeding or intended proceeding under section 13, the Superior Court of Justice may, for the purpose of preventing or reducing the risk of injury to the public, make such interlocutory order as the court considers just."

Subsection 14(2) applies subsection 13(5), as modified for this section. Subsection 14(3), again, allows ex parte orders-motions-to be made, and then we have a similar process as we did in the other two parts there.

The special purpose account: again, that is a very similar process, but you'll see that the first head is broader. It just says, "To assist victims of unlawful activities"-this is under subsection 14(3)-"or to prevent unlawful activities that result in victimization."

This takes us to the last two parts of the bill. Part V is a general part. Section 16 states, "Except as otherwise provided in this act, findings of fact in proceedings under this act shall be made on the balance of probabilities," which, as you know, is the civil balance of proof.

Section 17 is proof of offences. It says,

"17(1) In proceedings under this act, proof that a person was convicted, found guilty or found not criminally responsible on account of mental disorder in respect of an offence is proof that the person committed the offence."

Remember, here again unlawful activity, even if it's an offshore unlawful activity, must be a crime or unlawful activity in Ontario for any of this to apply.

Subsection 17(2) says,

"(2) In proceedings under this act, an offence may be found to have been committed even if,

"(a) no person has been charged with the offence; or

"(b) a person was charged with the offence but the charge was withdrawn or stayed or the person was acquitted of the charge."

Section 18 is designed specifically to deal with the issue of contraband. As you know, there are certain kinds of property that it is unlawful to possess, but we have in this bill legitimate owner and responsible owner defences, so we wanted to ensure that those defences couldn't be misused to make claim to possession of property where it wasn't lawful. It states,

"18. For the purposes of a proceeding under this act, a person cannot claim to have an interest in property if, under the law of Canada or Ontario, it is unlawful for the person to possess the property."

Section 19 deals with personal information. Subsection 19(1) states,

"The Attorney General may collect personal information for any of the following purposes:

"1. To determine whether a proceeding should be commenced under this act.

"2. To conduct a proceeding under this act.

"3. To enforce an order made under this act."

I would note, and I haven't noted to this point, that only the Attorney General may bring these actions. Even though the scope of unlawful activity is broad enough to pick up an act administered, say, by the Ministry of the Environment or the Ministry of Natural Resources, it is only the Attorney General who may bring these actions, so we have to have a collection right in here.

Subsection 19(2) states,

"Manner of collection

"(2) Personal information may be collected under subsection (1) directly from the individual to whom the information relates or in any other manner."

Subsection 19(3) deals with "disclosure to assist in administration or enforcement of the law." It says,

"(3) The Attorney General shall disclose information collected under subsection (1) to a law enforcement agency or another person engaged in the administration or enforcement of the law if the Attorney General is of the opinion that the disclosure would assist in the administration or enforcement of the law, would be in the public interest and would not be contrary to the interests of justice."

Subsection 19(4) is an "obligation to disclose information" and it states,

"(4) A person who has knowledge of personal information or other information to which the Freedom of Information and Protection of Privacy Act or the Municipal Freedom of Information and Protection of Privacy Act applies and who acquired that knowledge in the circumstances prescribed by the regulations made under this act shall, despite those acts and despite any confidentiality provision of any other act, disclose the information to the Attorney General if the person believes that the disclosure would assist in,

"(a) determining whether a proceeding should be commenced under this act;

"(b) conducting a proceeding under this act; or

"(c) enforcing an order made under this act."

Subsection 19(5) provides for an exception and it states,

"(5) Subsection (4) does not require a person to disclose information if the person believes that the disclosure would unduly interfere with the administration or enforcement of any act of Canada...."

Subsection 19(6) really deals with a person who has disclosed information under subsection 19(4). Certain kinds of individuals may not be compellable in a civil proceeding, so this section states,

"(6) Despite any confidentiality provision of any act, a person who disclosed information under subsection (4) may be required to give evidence related to that information in a proceeding under this act."

Finally, subsection 19(7), and this is fairly important, says,

"(7) In this section,

"`personal information' means personal information within the meaning of part III of the Freedom of Information and Protection of Privacy Act."

So the only kind of information subject to that regime, under section 19, is FIPPA personal information.

Section 20 deals with protection from liability. It states,

"20. No action or other proceeding may be commenced against the Attorney General, the crown in right of Ontario or any person acting on behalf of, assisting or providing information to the Attorney General or the crown in right of Ontario in respect of the commencement or conduct in good faith of a proceeding under this act or in respect of the enforcement in good faith of an order made under this act."


Section 21 deals with regulations and states,

"21(1) The Lieutenant Governor in Council may make regulations,

"(a) providing that orders under section 5 or 10"-that's the provision for legal expenses-"may only apply to legal expenses incurred for the purposes prescribed by the regulations and are subject to monetary limits prescribed by the regulations;

"(b) governing payments out of accounts referred to in section 6, 11 or 15, including governing the circumstances in which payments may be made, governing the amounts of payments, governing procedures for determining what payments are made and, in the case of payments under paragraph 1 of subsection 6(3) or paragraph 1 of subsection 11(3),

"(i) providing that payments be made only with the approval of the Criminal Injuries Compensation Board or another person or body specified in the regulations;"-so this is how the victims will claim-"and

"(ii) providing that a decision made under subclause (i) to approve or not approve a payment is final and not subject to appeal, and shall not be altered or set aside in an application for judicial review or in any other proceeding unless the decision is patently unreasonable," which applies the administrative law standard.

"(c) governing the giving of notice to the public of a proceeding under section 13," which is the conspiracy section, and the purpose of that notice is to make sure that potential private plaintiffs are aware.

"(d) prescribing circumstances for the purpose of subsection 19 (4)," which again is very important, that there will be regulations that refine and define how 19(4) is to operate.

"(e) respecting any matter that the Lieutenant Governor in Council considers necessary or advisable to carry out effectively the purpose of this act."

Subsection (2) states,

"(2) A regulation made under subsection (1) may be general or particular in its application."

I'll now go to part VI, and specifically to section 22. Rather than read this, because it's a little confusing, I thought I'd just try and give a plain-language explanation.

Under the Freedom of Information and Protection of Privacy Act, a record must be disclosed unless FIPPA stipulates otherwise. Section 14 does provide an exemption for law enforcement which deals with policing investigations or inspections leading to a prosecution or to fines, but Bill 155 is not a bill that provides for law enforcement in any of these respects. The bill only applies civil remedies. It's not penal; it's remedial and it's compensatory. Further, given that this bill is directed at organized crime, we were concerned that disclosing the fact of a record would tell organized crime a lot of information, ie, whether they are or are not under investigation. For that reason, we've established here that the Attorney General has the right to refuse to confirm or deny the existence of a record under Bill 155. That's 22(1).

Subsection 22(2) conforms the previous section with the requirements of FIPPA. Where there's a refusal to confirm or deny, the head must state (a) that the head refuses to confirm or deny the existence of a record; (b) the provisions of FIPPA on which the refusal is based; (c) the name and office of the person responsible for making the decision; and (d) that the person who made the request may appeal to the Information and Privacy Commissioner.

I believe the remaining sections in part VI are consequential to that for the most part, and they deal also with the Municipal Freedom of Information and Protection of Privacy Act.

Section 24 deals with commencements, as this act comes into force on a day to be name by proclamation of the Lieutenant Governor.

Section 25 provides that the short title of this act is the Remedies for Organized Crime and Other Unlawful Activities Act.

The Chair: We still have about 20 or 25 minutes for questions, so I'll allow probably about eight minutes for each party.

Mr Bryant: Thank you very much for coming. I just want to talk to you about what the bill does, but I also want to clarify what the bill is not going to do.

There's going to be some question as to overlap, whether or not this in fact is trying to do indirectly what the provincial government can't do directly, so we're going to hear from presenters on violation of the charter and violation of division of powers.

Let's just talk about division of powers for a moment. I don't need to explain to you that obviously there can be some overlap between the code and provincial powers, but the province can't boldly go where they're not allowed to go.

What's the ministry's position as to how this could survive a division of powers challenge when there are already powers under the Criminal Code for the seizure of assets?

Mr Simser: I think the best way to answer that is to briefly go into my understanding of how the Criminal Code works, not in great detail, what it's intended to do, and then how this bill works and what it's intended to do. I would posit to you that they are very different things.

The Criminal Code has a number of forfeiture proceedings that can be brought under it. The two primary ones that are dealt with are criminal organization offences and drug offences. The forfeiture proceedings there are penalties that follow the conviction of someone.

The process generally is this: the police would lay a charge; the crown then lays a restraining order against the property; there is a prosecution of the individual. If, and only if, the individual is convicted, then there is a forfeiture hearing that follows that as part of the penalty. It's separate from the sentencing of the individual but it is, in our view, part of the penalty. The Criminal Code is quite properly a penal sanction to activity.

Mr Bryant: I'm sorry to cut you off. I've only got about six minutes, so maybe I could just get right to the heart of my question.

A civil remedy, as I have always understood it, is something which repairs an injury to someone personally or to their property. A civil remedy is not a tool for enforcing a government scheme. How is this a civil remedy in that sense?

Mr Simser: With respect, I think that posits a civil remedy in a very narrow way. Certainly there are torts that are out there designed to repair and restore. You could talk about the conspiracy section as one that does that.

But one thing the civil courts do every single day is allocate disputes on rights of property. They do it every single day. If you've bought a house or if you have a house and there's an overlap between you and your neighbour, there is no injury per se necessarily there. They're not remedying an injury, but they are going to resolve the dispute on title to property.

This bill really talks about title to property. For example, in part II it says that if the provenance of property is unlawful activity, it denies title to the person who has the property. It has other provisions to protect legitimate owners, but the problem that creates at law is that that then creates a void.

If you say, "You can't own it," there's a void in law. The law doesn't like a void and the way the void is filled here is through the forfeiture process. The most important section here is that we will then take the proceeds of that unlawful activity and return it to victims. The purpose here from a civil law perspective is it's remedial and it's compensatory.

Mr Bryant: Thank you. One author said in 1998 in a national study that 80% of all money laundering cases have a foreign component. Does that sound about right? This bill doesn't address money that has a foreign component, because of course you couldn't enforce it in Ontario. Right?

Mr Simser: It depends. If the money is situated in Ontario-a typical money laundering is that the money is moved around.

Mr Bryant: Realistically, you'd park it somewhere else other than Ontario.

Mr Simser: If it's parked somewhere else other than in Ontario-

Mr Bryant: You can't get it.

Mr Simser: -we can't get it.

Mr Bryant: Fair enough. I just want everybody to understand the scope of it. There is nothing in this act that provides for a means to create the net worth profiles for the suspects.

Mr Simser: I'm sorry. I'm not sure I understand that question.

Mr Bryant: The mobsters-we need to find out what the assets are, how much money etc. This does it one at a time; in other words, one case, one piece of property at a time. Is that right?

Mr Simser: It's an in rem action so it does focus on property.

Mr Bryant: I know this is obvious, but the bill doesn't address the issue of resources in and of itself. In other words, the bill doesn't commit to an army of forensic accountants being brought in.

Mr Simser: No, the minister has made that commitment but it's not in the bill.

Mr Bryant: Right. The minister said today in the press conference that this bill isn't a panacea-fair enough-that it's a parallel process to the criminal provision.

Do I take it that the ministry is now going to move away from enforcing the Criminal Code with respect to the Criminal Code provisions on organized crime and instead devote its resources to this civil remedy once the bill is passed?


Mr Simser: No. I'm not the expert on what the ministry may do and what the criminal law division will do, but my understanding is in fact they're beefing up their process rather than knocking it down. One of the problems is that the nature of things has changed and there's more work to go around than can be done in this area. But this bill doesn't change the priority. There are often going to be situations where you'll want to go through the Criminal Code process, it's appropriate to do so and you will do so, and this does not take away from that all.

The Chair: One minute, Mr Bryant.

Mr Bryant: You said something about beefing up. Leaving aside the issue of money allocation, because there's no new announcement today-the money is from the May 2000 budget-there's nothing in this bill that deals with transaction reporting by financial institutions.

Mr Simser: Which for the most part are federally regulated institutions.

Mr Bryant: Just to be clear, because this goes on the record, you shook your head; the answer was no.

Mr Simser: Right, thank you.

Mr Bryant: That's fine.

Also with respect to the sharing of information between police forces, because we talked about how this is a national and in fact an international issue, the bill doesn't address that information-sharing component, does it?

Mr Simser: No, the bill does not address that.

Mr Bryant: It looks like my time is up.

The Chair: Yes, your time is up. Mr Kormos, you have about eight minutes.

Mr Kormos: Part VI: run that past me again.

Mr Simser: Part VI?

Mr Kormos: Yes, the amendment to the Freedom of Information and Protection of Privacy Act.

Mr Simser: Right. What it says here is-

Mr Kormos: I've read it.

Mr Simser: I beg your pardon. This gives the ability for the head of whatever the enforcement arm is here to refuse to confirm or deny the existence of a record.

Mr Kormos: Give me an example.

Mr Simser: For example, there may be a proceeding against an outlaw motorcycle gang-I don't want to prejudge or-

Mr Kormos: Or me or any member of this Legislature.

Mr Simser: I was thinking specifically about something that is thought of perhaps as organized crime and perhaps under the conspiracy section. If that proceeding is in its formative stages, if we're looking at seeing whether we could convince a judge, we're worried about telling that particular organization that they may be a target of our activities. They're likely to know that if they're a target of our activities, that may impact on the policing side and there may be sensitive investigations. So that's why this provision is here.

Mr Kormos: I was reading some of the material Mr Fenson obtained for us-and my gratitude to him. He makes reference to a comment by the second circuit appeal courts in the United States with respect to the forfeiture legislation there, and the second circuit stated, "We continue to be enormously troubled by the government's increasing and virtually unchecked use of the civil forfeiture statutes and the disregard for due process that is buried in those statutes." I appreciate that it's just an excerpt and it's an observation over the course of some 20-plus years of experience in the United States with forfeiture, but when I read that, you understand why my antennae go up, right?

Mr Simser: Yes. Do you know when that comment was made? Is there a date to it?

Mr Kormos: It's not cited.

Mr Simser: Just so you know, there's been a lot of controversy, especially at the federal level in the United States, and on April 25, 2000, President Clinton signed a bill called the Civil Asset Forfeiture Reform Act. It was the biggest reform in that area in 200 years and it substantively changed-Congress felt that there were problems and it dealt with it through that Civil Asset Forfeiture Reform Act.

Mr Kormos: For instance, you know when you refer to the bill that it includes part V, section 17: "An offence may be found to have been committed even if ... a person was charged with the offence but the charge was withdrawn or stayed or the person was acquitted of the charge." I could be charged with an offence and found not guilty by a court, yet your legislation permits the Attorney General to have a second kick at the can.

Mr Simser: The legislation doesn't deal with you, per se. There's not what I call an in personam-that's Latin-but it wouldn't be Ontario v Mr Kormos, if I may. It's an in rem action so it deals with the property itself. What the Attorney General must do is establish a nexus between the property-and let's say there's a part II allegation in a proceeding, so we're saying it's proceeds. What the Attorney General must do is prove that that property and the unlawful activity are connected such that the provenance of the property is as the proceeds of unlawful activity. There's no provision in here to fine or convict anybody; it deals with the title to the property. There are all kinds of ways that you can assert defences to that allegation if it's proven, once it's proven, but only once it's proven.

Mr Kormos: Some of the report provided by Mr Fenson refers to-and this is the Clinton legislation you were speaking of-the issue of the need for reform and talks about the matter of burden of proof and the suggestion that the general civil standard of proof is too low a standard to assign to the government in this type of case, property forfeiture. Was that contemplated or considered in the drafting of this bill?

Mr Simser: Yes, it was. We looked very seriously at the issue.

Mr Kormos: So flesh that out.

Mr Simser: We looked very seriously at the standard of proof, but we felt at the end of the day that, at every stage, the court has to approve everything that goes on in terms of an action. We've added, if I may, to the standard of proof that where there's something that needs the standard of proof but is not clearly in the interests of justice, because that's in all of the operative sections that I went through, the court may refuse to make the order. So there is the civil standard of proof, and even if that balance of probability is met, the court has an inherent jurisdiction where it is clearly not in the interests of justice to make an order to refuse to make that order.

Mr Kormos: Mr Bryant referred, and so did you, to the Criminal Code. Is it section 430?

Mr Bryant: Show-off. Are you talking about 462?

Mr Kormos: It's 462.3. What's the policy in the province of Ontario, so far as you're aware? If you aren't, just-how is the crown attorneys' office approaching those sections in the Criminal Code? How many times have they been utilized? Are there investigative resources being put into enforcing 462.3 of the Criminal Code?

Mr Simser: I apologize. I'm not qualified to give you a proper answer to that question.

Mr Kormos: What's being contemplated? Who's going to conduct these actions under this legislation?

Mr Simser: I believe what the Attorney General has said is that he wants to create a specialized enforcement unit and it will consist of civil lawyers-obviously that will be the heart of it-it will consist of a forensic accounting capacity and it will consist of investigators, not police investigators but investigators in the traditional sense that most plaintiff lawyers use investigators, just to make sure that they establish all the facts of their case.

Mr Kormos: Are you aware of any drafting of guidelines or policy as to priorities for investigation and-I guess "prosecution" isn't the right word, is it?

Mr Simser: Under Bill 155?

Mr Kormos: Yes.

Mr Simser: We'll have to see whether the Legislature sees fit to pass it before we-

Mr Kormos: No, I didn't say that. I said, has there been any contemplation of what's going to be targeted?

Mr Simser: I don't think I'd be prepared to say. We certainly are trying to contemplate in the eventuality that the bill is passed, but I don't think we're as far as saying we're going to target telemarketing activity or prostitution activity or outlaw motorcycle gangs or anything like that. I don't think we're that far down the road yet.

The Chair: About one more minute, Mr Kormos.

Mr Kormos: You made reference to the foreign conviction issue. You looked at me because you were sort of saying, "That's the answer to your question." I wasn't talking about somebody convicted elsewhere of something that isn't a crime here; I was talking about somebody being convicted of, let's say, a theft in some other jurisdiction, which is a crime here, where that conviction was the course of a political persecution. Yet the conviction stands as proof, doesn't it, notwithstanding how it was obtained?

Mr Simser: It creates a presumption of proof, but if we're truly talking about a hypothetical fact situation where it truly is egregious, that the theft is really political persecution and the defendant can make that case, the court can always say that it's clearly not in the interests of justice in that circumstance to make an order under this bill and they can refuse to make the order.


The Chair: Mr Tilson, you have eight minutes.

Mr David Tilson (Dufferin-Peel-Wellington-Grey): The paper prepared by Mr Fenson has been referred to, which was dated yesterday. I don't know whether you've had an opportunity to review that.

Mr Simser: No, I haven't.

Mr Tilson: I'm sure you haven't. It deals mainly with the proceeds-of-crime legislation in the United Kingdom and the United States. You mentioned the different jurisdictions that you, as a staff person involved in this legislation, have looked at. It's difficult to talk about that, because these are completely different types of jurisdictions, but having said that, can you tell us how you may have improved on those specific pieces of legislation, acknowledging how you've emphasized that this legislation we're putting forward isn't criminal legislation, that it has other intents?

Mr Simser: Absolutely. One of the challenges whenever you engage in something that's innovative and becomes the first of its kind in Canada is what you look to, to learn from. We started with the United States, primarily because it has the longest history in this area. They've been active with this area since 1789 and there's a long, long line of cases in the United States Supreme Court and at all of the circuit court levels to learn from. I believe there are at least 140 federal US statutes that deal with civil asset forfeiture. To my knowledge, virtually every state has a civil asset forfeiture provision of one kind or another, although, to be honest, we focused in detail on New York and New Jersey, simply because they provided a nice comparative base for us to study. We not only went through their laws, but we met with their officials to talk about where they had problems and where they had successes. Mr Flaherty, the Attorney General as he was then, was quite committed to learning not only what worked but what didn't.

The United States is particularly challenging in some respects because it has had such a long history. We took great interest in looking at Australia, which has been active in this area since 1990, particularly New South Wales; the republic of Ireland, which has been active in this area since 1996; the republic of South Africa, which has been active in this area since 1998; and then there was the United Kingdom. They have not actually enacted laws that are similar to those that are in Bill 155, but in June 2000 Prime Minister Blair endorsed as a question of policy this approach. We understand that they're likely to look closely at, for example, the model in the republic of Ireland, and follow through. To my knowledge there is no legislation that has been introduced yet in the United Kingdom on this front.

Mr Tilson: I've had an opportunity to look at some of the criticisms of the legislation, much of which we'll hear in the hearings-constructive criticism, I would hope. One of the criticisms that comes forward is the fear that this legislation will go beyond organized crime, that it will deal with the average citizen. Some of it may have been referred to by members of the opposition, that this legislation will have an effect either by the investigation by the police authorities or indeed the applications that are made by the Attorney General. How can you assure the committee that this legislation won't do that?

Mr Simser: There are two parts to the question. One is, what is the scope of the legislation? I think the more important part, and the part I'd like to start with, if I may, are the safeguards that are in the legislation. There are numerous safeguards. Some of them are very technical. They're almost buried in the legislation, in the sense that a court may refuse to make an order where it's clearly not in the interests of justice. Other protections are much more up front, the first one being that every step here must be approved by the Attorney General and every proceeding must be brought by the Attorney General, and then it must be brought and approved by a court.

Coming back to your previous question, when you look at some of the problems, some of the bigger problems, for example, in the United States, have not been with judicially authorized actions in this area; they've been with administrative actions, where a police officer, for example, is empowered in certain circumstances to do what is in essence civil forfeiture, and take the property, then force you to prove that it was lawfully yours. We're not going there; we're not going down that route at all. That's the first thing.

The second thing is that organized crime in and of itself as a statutory matter is very difficult to define. This is something we learned particularly from the South Africans. They said that, as a matter of legislative drafting, it's a very difficult challenge to define that and yet capture what you want to capture. So what we've done is we have focused on property and its connection to unlawful activity. That's the approach to drafting, if you will, that we've taken in this bill.

Mr Tilson: People in the legal community in particular have talked about, which the minister contradicted today, the topic of reverse onus. In other words, the onus is on the person who is being accused of having property that's going to be used for illegal activity. My understanding is that that reverse onus does not exist. Can you clarify that topic, anticipating what's going to be said in the hearings?

Mr Simser: Absolutely. There is no reverse onus in this bill. Before anything can come forward, the Attorney General must satisfy the court of its case.

There could be confusion in this area with some lawyers because in some American laws there is in fact a reverse onus, and some of them have been quite harsh in their application. We deliberately chose not to go down that route.

Now, there is a positive defence that you can assert either as a legitimate or a responsible owner, but that's not a reverse onus at all. The Attorney General must still make their full and fair case, and the court must be convinced of it, before you're ever required-and then, once the Attorney General has proven its case, you have the opportunity as part of your defence to assert a specific statutory defence that's in the bill.

The Chair: You've got one more minute, Mr Tilson.

Mr Tilson: The other criticism that seems to come forward, that has been in the media at least, is why in the world is the province of Ontario getting involved in this topic? In other words, it's the constitutional issue. It's been raised this morning, that this is something that is the exclusive jurisdiction of the federal government, and why is the province getting involved in this? Can you, in a nutshell, comment with respect to that criticism?

Mr Simser: Our view is that Bill 155 invokes the jurisdiction of the province over property and civil rights. In fact, I'd be interested to see whether the federal government could do this. I don't think so, because this is a civil right of action and it deals with title to property. That's one of the main components in here. The province regulates that in all sorts of ways. It deals with compensation for victims. Again, the province deals with that in all sorts of ways.

There are no penal provisions in the statute; there are no fines; there are no penalties; there are no convictions or charges laid under Bill 155. It is not a penal statute. It's remedial and it's compensatory. For that reason, we think it invokes our inherent jurisdiction in the province.

The Chair: Thank you very much, Mr Simser.


The Chair: We're now moving to public submissions. The first speakers are Mr Alan Borovoy, general counsel, and Stephen McCammon, associate counsel, of the Canadian Civil Liberties Association. Good morning, gentlemen. You have 20 minutes.

Mr Alan Borovoy: I'd better start talking. Thank you very much. I'm Alan Borovoy, and on my left and your right, physically if not politically, is Stephen McCammon from our organization.

Since the federal Criminal Code already contains provisions very similar to the ones at issue here, there are of course some serious constitutional questions as to whether the province has the jurisdiction to enact the bill at issue. Since, however, the Canadian Civil Liberties Association does not have as part of its mandate to be concerned about the distribution of power between the federal and provincial jurisdictions, our submissions today will assume the constitutionality of this bill, at least for those purposes-charter purposes is another issue, but at least for those.

Having said that, quite apart from the constitutional matters, it is our view that there is very little in this bill that is worthy of enactment. Those few matters that arguably are worthy should be substantially amended.


As a general proposition, it is acceptable to seize property that has been obtained through crime. It is even acceptable for the state to initiate procedures for such seizures. What is not acceptable, in our view, is, as between alleged perpetrators and alleged victims, for the power and resources of the state to be marshalled against one in favour of the other on the basis of a judgment made at the political level, and then for the state to have to do nothing more than prove its case on a balance of probabilities. This represents far too much weighting against the interests of the citizen who happens to be disfavoured by the state for whatever reason that citizen is disfavoured.

In our view, the prerequisite for such action against any of our citizens is a court finding beyond a reasonable doubt that a crime has been committed by an identifiable offender and that offender owns the property in question. Only a set of circumstances of that kind, in our view, would justify the kind of state-instigated procedures for seizing citizen property.

But then to go a little further into the bill, it talks about proceeds of unlawful activity. It defines "unlawful activity" as any offence against any federal or provincial statute. Do you really wish, for example, to be able to seize the profits of a merchant who stays open in violation of Sunday closing laws? This bill would enable you to do precisely that. In our view, there is no excuse for an overbroad definition of that kind. The definition of "unlawful activity" for these purposes should be confined to the most serious offences associated with organized crime and not just open it up to anything.

The second part of the bill deals with instruments of unlawful activity, property that is used in one way or another to facilitate the commission of certain crimes. Our view is that this section is fundamentally unfair.

We heard a few moments ago some talk about what an owner has to do in order to demonstrate that he's a responsible owner. Consider the case, if you will, of some restaurateurs whose premises are being used for drug dealing. Now, they know it. The bill says they must notify the authorities as soon as they know or ought to know that these activities are occurring. Suppose these restaurateurs know very well that it's happening, but they're frightened, they are afraid to report. Do we then say that we are prepared to divest those people of their sources of income for reasons like that? I suggest that this is an obvious injustice.

But let me press it even further. Property very often serves many functions and many persons. In our view, there is something improper about rendering that property seizable simply because one of those persons may be an offender and one of those functions may be unlawful. After all, property that can be used this way can include an awful lot. It could include cars, homes, even clothes. I suppose it will take not very much imagination to conceive of some pretty absurd outcomes from trying to use this. As questionable as it may be to go after property in this way that has been used for unlawful activity, to go after it because it's likely to be used-now we're talking about the future and we're talking about getting evidence of future activity. This, I'm afraid, has the capacity to transform at least this part of this into impoverishment by clairvoyance.

I go to the third part of the bill, the part that deals with conspiracies that injure the public. Here the problem is the overbreadth and dubiousness of some of the remedies available. It says that a court may issue virtually any order in order to rectify. Then it goes on and, in trying to be more specific about it, it says, for the purpose of preventing or reducing the risk of injury to the public, a court may require anyone to do or refrain from doing anything. To what extent can this include ordering people not to do legal things as well as illegal things? The obvious example one thinks of is the next time there is an international trade conference in Ontario and we are concerned that some people may misbehave and that misbehaviour will injure the public. To what extent then may a court, on the application of the Attorney General, prohibit lawful demonstrations as an effective way of getting at potentially unlawful behaviour? In our view, this section should be limited, where court orders are concerned, to unlawful conduct and nothing beyond that.

Finally, on the issue of damages, you have a situation where damages can be awarded to the crown for injuries done to the public. In our legal system, we don't have much precedent for giving one party damages for injuries that are done to somebody else. Our legal system usually contemplates giving the damages directly to the injured parties. The problem here becomes, what kind of damages? What is the measure of damages? What are the criteria? Not a word. Could you have a situation where one party can be wiped out in order, presumably, to compensate for what has been done to another party? This doesn't make it clear how far it could go. At the very least, then, it is our view that there ought to be guidelines and criteria written into the bill for the computation of damages if damages are to be awarded at all.

Just to summarize these recommendations, first, where it concerns the proceeds of unlawful activity, we suggest that a prerequisite be a finding by a court beyond a reasonable doubt that a crime has been committed by an identifiable party who owns the property. Less may be acceptable for purposes of temporarily freezing the property, pending the outcome of those proceedings, but that ought to be at least the prerequisite for the state going after people's property for such purposes in this way.


Second, the definition of "unlawful activity" for these purposes should be confined to the most serious offences associated with organized crime.

Third, the part dealing with instruments of unlawful activity should be removed.

Fourth, the power to order people to do or not to do things should be focused on unlawful conduct only and there ought to be no damage provisions unless there are criteria and guidelines to indicate to a court what the appropriate measure of damages in these circumstances might be-all of which is, as always, Madam Chair, respectfully submitted.

The Chair: Thank you, Mr Borovoy. We have about eight minutes, maybe seven: two minutes each.

Mr Bryant: Do you want me to go first?

The Chair: Yes.

Mr Bryant: Mr Borovoy, thank you for coming, as ever. I wonder if you could just let us know, or maybe your colleague in justice could let us know, whether or not the past use of similar legislation in other jurisdictions has resulted in any injustices in those jurisdictions. I'm wondering, instead of the hypothetical of the merchant being harassed, about examples of where that's actually happened, or talk about the abuses of similar legislation in other jurisdictions.

Mr Borovoy: This issue has been a considerable controversy in the United States. The presentation made by our colleagues in the American Civil Liberties Union documents case after case after case of pretty awful injustices perpetrated under their counterpart to this legislation. As a consequence, there were bills on the table that would severely restrict the scope of the power at issue. We'd be pleased to send this on to you, if that would be helpful to you.

Mr Bryant: It would. Just so I understand, is it your position that in fact, arguably, section 8 of this bill is in violation of the charter?

Mr Borovoy: I think some of this could raise charter issues. As a result of recent decisions by the Supreme Court of Canada, I have become increasingly reluctant to make predictions about judicial behaviour. But suffice it to say that I think that there would be some serious charter arguments available under some parts of this bill.

Mr Kormos: The matter of the standard of proof, the balance of probabilities, the civil standard: it's my understanding from some of the material received that in the United States this has been of concern that the historical civil standard, balance of probabilities, is too low a standard. The suggestion has been made that an intermediate standard between that civil standard and proof beyond a reasonable doubt, one of clear and convincing evidence, is more appropriate. Would you comment on that, please?

Mr Borovoy: I think, yes, clear and convincing would be a more appropriate standard than on a balance of probabilities. But remember that our recommendation that the prerequisite for moving ahead at all is basically a finding by a criminal court that beyond a reasonable doubt a crime has been committed by a discernible offender. So while I would agree with you that upping the standard that way is better than not upping it, I would suggest that the prerequisite for the state marshalling all of this against the citizen-I think what we have to remember about all this is not what a court ultimately has to decide, but what a citizen initially has to face, that is, that citizen faces the powers and the resources of the state, has to take on the state in this proceeding. The state simply then has to prove on a balance of probabilities.

That's what we say becomes, from our standpoint, the awful thing to face citizens with on the basis of no criteria at all that are in the bill. It's just the choice of the Attorney General to move against this one rather than that one. We say then that the prerequisite for that Attorney General judgment should be the finding of a criminal court. Then it's a different story.

Mr Tilson: Just on that point, because I must confess I'm not clear where you're looking. You were very critical of clause (b), in particular, of unlawful activity in section 2, which says that "`unlawful activity' means an act or omission that ... is an offence under an act of a jurisdiction outside Canada, if a similar act or omission would be an offence under an act of Canada or Ontario...."

Mr Borovoy: I didn't address that one. I was addressing only the earlier part that dealt with an offence under a provincial or federal statute.

Mr Tilson: OK. Can you be clear as to what standard you support? I assume you support some standard.

Mr Borovoy: I'm not sure now what your question is.

Mr Tilson: The question is specifically on the balance of probabilities versus beyond a reasonable doubt or something in between, as was suggested by Mr Kormos. Can you be clear as to what you think the province should be doing?

Mr Borovoy: I could live with a balance of probabilities for civil seizure if the prerequisite were met, that is, a criminal court has already found beyond a reasonable doubt that a crime has been committed by an identifiable offender and that offender owns the property in question. Then you can go after him for that.

Mr Tilson: The problem is, of course, the province doesn't have the jurisdiction to get into criminal activity. The province has the capability of civil seizure.

Mr Borovoy: I'm sorry, that is not accurate, sir. The province enforces the criminal law and decides who they're going to go after in what kind of cases. Those decisions are made at the provincial level. The feds decide what the criminal law shall provide, but the province administers and enforces the criminal law.

Mr Tilson: You gave some different types of provincial offences and criminal offences that may be unlawful activity. Breaking the law is breaking the law. That's what the province is concerned with: breaking the law is breaking the law. If I understand what you're saying-and this is what I'd like you to be clear on-are you saying that this legislation, if it's enacted, and of course, I get the impression you're skeptical whether it should be enacted at all, but if it is enacted, and I hope it is, quite frankly, are you suggesting that there be different categories of breaking the law?

Mr Borovoy: You bet.

Mr Tilson: What are they?

Mr Borovoy: I've already suggested that. If I'm not being too clear, forgive me. I thought my language was quite clear. I suggested that the definition of unlawful activity for purposes of seizing people's property should be confined to the most serious offences, that not every minor transgression should be able to lead the state to go after that person's property. I gave the specific example for those purposes of the merchant who sells some goods in violation of Sunday closing laws and I asked the question, "Do you really want to be able to seize whatever that person sold?" Yes, it's unlawful. Yes, a person would face a fine for that illegality. But how much more do you want to be able to do to him for something that really isn't all that serious? If you're interested in organized crime, then by all means use stuff like this for the serious things and not for those things.

The Chair: Mr Borovoy, thank you very much for coming.

We will recess for lunch and return at 1 o'clock. Please, gentlemen, try to be on time. Thank you.

The committee recessed from 1150 to 1301.


The Chair: We'll get started. The first submission for this afternoon comes from Scott Newark, special counsel, Office for Victims of Crime. Mr Newark, good afternoon.

Mr Scott Newark: Good afternoon. Madame Chair, copies of our brief have been given to the clerk for distribution as well. I would like to thank the committee for the opportunity to come and make a presentation before the committee, this time on Bill 155.

Our office was invited to attend the organized crime summit, referred to earlier, in August. I actually have a semi-accidental background involved with organized crime as a prosecutor in Alberta dealing with bikers and then subsequently the Canadian Police Association on the criminal context of it.

The summit opened up areas in relation to civil forfeiture that this bill captures that I think are an important addition to what can be done in relation to not only organized crime but also property deprivation. Obviously, what the bill specifically does is provide a collection of civil remedies to deal with people, or an attempt to compensate people, who have had property taken from them as a result of unlawful activity. It does other things, but it does that specifically.

Our office was actually involved in some consultation with the ministry, with Mr Simser, specifically in relation to a couple of areas, which is what I'd like to focus on today, as opposed to the other areas that I know you will be discussing with other witnesses; about the importance of victim compensation, where possible; about dedicated funds that are created as the means of getting at specific revenues; and then finally, what you actually do with those revenues once you get them, or the means of distribution of those forfeited proceeds. I want to just very quickly, because I'm aware of the time constraints, go through some of those points and leave some time for questions.

Bill 155 obviously has a capacity to provide some compensation for people who suffer property loss, or other losses, as a result of unlawful activity. In that sense, obviously it's a welcome addition insofar as it's able to do that. I would also suggest to you that there is some real significance in the notion, the phrase that is used to describe some of this stuff about taking the profit out of crime. It's not just a snazzy title. It actually is a very sound strategy. Certainly in my experience that is particularly relevant when you are dealing with attempting to deter criminal conduct or anti-social conduct or unlawful conduct, that you're taking the means or the motive for which something is being done out of it.

As you know, the bill creates in effect what are dedicated funds. It's a very good idea generally to do that, in our experience. It's similar to what is contained in the Compensation for Victims of Crime Amendment Act or the Victims' Bill of Rights Amendment Act, so I included a copy of it as a tab in the brief so you can see a comparative kind of fund.

In section 6 of the bill, which actually lists the purposes for which the payments can be made, I would just make a couple of comments about that, and perhaps you may wish to pursue this with other witnesses as well.

It's a very good idea generally to have those kinds of specific purposes for which funds can be paid out, but I think what you want to do is take a look to make sure that there is the infrastructure and a commitment within administration to get the funds out the door, so that it lives up, if you will, to what the proper intentions and promises of the Legislature are in this stuff. I use, as the example of that, the equivalent fund, the victims' justice fund, which has not been able to do that. It has accumulated, as you know, a surplus, because the funds, although coming in and required to be spent on specific purposes, have not been getting out the door to where they should. So it's a good idea to do this, but I think you want to pay careful attention to the fact that we actually have the means by which we're going to be able to disburse the funds out to meet those goals set out in section 6.

In subsection 6(3), I also am not entirely sure what those funds are for, "to assist victims of unlawful activities." I am not exactly sure what that means in the context of what subsection (1) says. I presume that the rest of that section, "to prevent unlawful activities," essentially would be a vehicle by which you could fund, in effect, ongoing investigations necessary to do this, which is a very good idea.

I should also point out that it appears that the criteria about this, how you're going to actually be able to use this money and the specifics of how it goes out, appear to be something that will be contemplated in the regulations set in section 21. I, at least, don't have a copy of the regulations. I don't know whether or not they've been provided or drafted. My experience suggests that is something the legislative branch may well wish to have a good eye on, because frequently that is where the real essence of how you get to what it is that the legislation intends is actually met or not met. In a related subject, that was specifically the case in a federal statute called the Seized Property Management Act that set out a very laudable scheme, but when you actually got down to the regulations, the intent of how it was done was somewhat different than I think a lot of people actually had foreseen.

The second part of dealing with the notion of funds is who gets to make the decisions in relation to that and on what basis that's done. Again, that is to be established, pursuant to section 21, by the regulations, so I think you want to be alert to looking at exactly what they say.

I would make one comment in relation to that based on the experience that we've encountered so far. In subclause 21(1)(b)(i), there is a reference that it may be the Criminal Injuries Compensation Board that's involved in paying that out. I would add a word of caution to that. One of the most frequent comments we have from people around the province, either as crime victims or victims' service providers, is that there is a significant delay in being able to get what the Criminal Injuries Compensation Board does now in its mandate. So if we are going to add more things to it, you want to keep a close eye on that because there is already a delay about that.

Obviously the idea of an independent, or done by regulation-third party involvement in those kinds of decisions is quite important, but you want to make sure there is not something that causes undue delay or defeats the purpose of what is otherwise laudably intended in the bill.

I watched a little bit this morning, and I saw both Mr Borovoy and Mr Bryant make the point that what is contained in here has a property focus obviously, but this is not in any sense to be viewed as a replacement of Criminal Code enforcement. I would like to echo that. In particular, if we're dealing with attempting to compensate people who have lost property or suffered damages as a result of unlawful conduct, I would suggest, if that's part of the overall goal of this bill, something like enforcing is the administrative priority of fraud prosecutions or credit card prosecutions or enforcing restitution orders; indeed, actually making that part of an existing victims' service. We might even spend some of the $50 million, perhaps, on augmenting victims' services so that you can actually help people get the restitution orders that are already out there. That too would be, I would think, a laudable complement to this bill, using the organized crime provisions and the enterprise crime proceeds provisions contained in the Criminal Code. All of those things I think are subjects that need to be taken in combination if the intention is to follow up with this, at least insofar as the notion of compensating people who have suffered loss.


I know there were some suggestions at a national level on this kind of approach about the wisdom of making sure that wherever possible you co-ordinate the approach of the enforcement and implementation of this so that you don't have different bodies doing that. I very much recommend that. It was something, to a certain extent, that we were involved in earlier, and that should include all of the components that would be involved in this so that people aren't operating in isolation and you know what is available and who's doing what.

The final point I'd like to make-and it's really just a housekeeping thing but it's something I think I'm probably right about. Subsection 14(2) of the act deals with the interlocutory orders. It says that subsection 13(5) applies. Unless I miss my guess, that's a misprint. I think that should probably be 13(6) that applies, so I think you may want to just-unless I'm wrong about that.

Mr Tilson: Subsection (2)?

Mr Newark: Yes, it's 14(2). I actually had a clue because it said, "Presumption of risk of injury to the public," which was the title on it. I think what it means to apply is subsection (6), because that is the presumption of risk in the interlocutory order. I think it's just a misprint.

Those are all of my submissions. This bill clearly has some content in it which would facilitate compensation of crime victims who've suffered loss as a result of unlawful activity and in that sense is a welcome addition.

Thank you very much. I'll attempt to answer any questions anybody has.

The Chair: Thank you, Mr Newark. We have about three minutes from each member, starting with Mr Kormos.

Mr Kormos: No, thank you.

The Chair: No? Mr Tilson.

Mr Tilson: I think it's appropriate that you be here today because obviously one of the main purposes of the legislation, if not the main purpose, is to help compensate victims of crime for losses that have been sustained as a result of unlawful activity.

You made some comments with respect to section 21-

Mr Newark: Regulations.

Mr Tilson: Sorry, the regulations, and specifically the comment about approval being given by the Criminal Injuries Compensation Board. You raised a caution that you were concerned, from experience in dealing with that board, that there might be delays in getting monies out. If you didn't use that vehicle, is there another vehicle that you would recommend?

Mr Newark: I'd actually probably include somebody from that board or individuals off of that board and some of the other players that are involved in the system that are contemplated in section 6, the different parties that would be involved.

There's nothing in the act and we don't know the regs yet to see how you're going to balance the priorities of payment, so I think what I would probably do is approach it from the basis of having some kind of subject knowledge, in other words, some relevance, about the purpose of the payment and some notion of independence or arm's length so that you don't have, just to use the example, a police service that would have a direct benefit from having the dollars paid that way.

To a certain extent you'll probably be able to get at some of that by the priorities you set out in the regulations as to-I don't know if that's contemplated-who takes first charge or something like that, as opposed to assigning it formally to a body that already has a very heavy caseload.

Mr Tilson: Mr Borovoy raised some comments this morning. You indicated you'd heard him with respect to the tests, the debate whether it should be beyond a reasonable doubt, on the balance of probabilities, or something in between. You're a lawyer?

Mr Newark: Yes.

Mr Tilson: Do you have any comments on those remarks?

Mr Newark: Sure. It's a in rem proceeding; it's a property-related proceeding. Frankly, I did listen to some of what Mr Borovoy had to say and I must admit that if you went down some of the road that he was attempting to suggest it should go, that would take you into criminal jurisdiction. Frankly, I think this has been very carefully drafted so that it confines its applicability to areas over which the province has jurisdiction. It doesn't matter whether or not, in my opinion-if there's a deficiency, for example, as I think there is in the federal legislation, that doesn't open up automatically a hole that the province can jump into. The province can only act appropriately within its own jurisdiction.

So I don't agree with his conclusions about changing the standard. The standard is appropriate when you're dealing specifically with a property focus. That's a significant difference, obviously, from what the Criminal Code provisions are about, where it's targeted to a specific individual, with specific property linked directly to that. So I would say there has obviously been some fairly careful analysis of this, and it seems to me they're on the absolutely correct track about keeping it very carefully defined and defensible, ultimately, in court.

The Chair: Mr Bryant.

Mr Bryant: Thank you for coming, and thank you very much for these written submissions. Maybe you can explain, as a former prosecutor, why it's necessary for this government to make a significant investment in terms of investigative resources, an army of forensic accountants, because as I understand it, in order to execute these tools it's enormously complicated; it's not a simple matter. Can you explain why that is?

Mr Newark: Not really, is the short answer. I've never been involved in any organized crime prosecutions in relation to assets. Mine have been more about dealing in bike gangs, specifically in relation to some of their activities. It wasn't directed at property.

I think your general statement is correct, though, that it's recognized as being a complicated, precise process that generally requires, as you put it, the army of forensic accountants. I think that's probably the reason why.

Mr Bryant: So if we don't get the regulations, if we don't get the army of forensic accountants, if we don't get all the resources necessary that have been called for by this committee, then in fact the purposes of this bill are not going to be fulfilled.

Mr Newark: I don't think that's unique to this bill. We've spoken before about that, where passing legislation is one part of the exercise; the other part of the exercise is making sure that when you do that, you anticipate and plan for what's necessary to put into effect the laudable ideas that you've got here. From the care that has been taken with this legislation, I think people have figured that out, in my sense.

Mr Bryant: I didn't understand something in section 6 of your submission, conspiracies that injure the public. In the last paragraph you said, "Of interest, the directed expenditures do not include compensation for victims of the unlawful activity." Can you explain that?

Mr Newark: If you look at the-

Mr Bryant: Let me put it this way: do you have any concerns there?

Mr Newark: No, because I think it's covered off in the legislation as to why that is the way it is.

Mr Bryant: I think this was raised in the question by Mr Tilson, but in order to achieve the independence desirable, ideally, how would we do that, addressing recommendation 7?

Mr Newark: I'm sorry. Do you mean the people essentially making the decisions about what happens with the money?

Mr Bryant: Sorry. I wasn't very clear. Under subsection 21(1), I guess the Criminal Injuries Compensation Board is going to be used. They're already totally overburdened, yet at the same time we want to have some arm's length mechanism in order to get the money to the victims. What's the best way to keep the independence but at the same time execute the purposes of the bill?

Mr Newark: Traditionally the institution that has an interest in receipt of the funds is not specifically and exclusively involved in making the decision, so I'd involve the parties there. Subsection 21(1)(b)(i) only mentions the CICB as a possibility; it doesn't say that it's going to be the CICB. To reiterate, frankly I would think you would include crowns, police officers; I'm anticipating there's going to be some kind of a coordinated unit involved in this stuff; our office is there with a mandate in a similar kind of thing. Those kinds of people, probably acting in concert, are better, I would think, than just the ministry staff involved in it or any specific agency in effect making decisions about potentially their own funding.

Mr Bryant: Back to resources: in addition to investing and executing it in terms of the law enforcement side, would you agree that in order for this bill to work, the civil courts themselves are going to need some assistance. Because now they're going to get all kinds of new remedies which they're going to have to deal with, and the civil courts, as you know, are totally overburdened right now.

Mr Newark: Logic does tell you that if you're going to add what is in effect a new process or application, there has to be some recognition that it may take some time.

Mr Bryant: What involvement do you think your office ought to have in perhaps ensuring, in terms of monitoring or otherwise, that the purposes of this bill are fulfilled?


Mr Newark: During the consultations, we offered to participate in the kind of panel that's contemplated in section 21 in the regulations. I spoke, actually, with the chair this morning, and it's something that we would very much like to be involved in. We're doing that already on other things specifically related to victims out of the victim justice fund. It would seem logical that if you're dealing with a fund that has that kind of purpose, an office like ours, with the mandate that it has, would logically be involved in it. So just specifically that? Yes, we'd very much like to be involved.

Mr Bryant: A last question?

The Chair: Yes.

Mr Bryant: Just so I'm clear on this, the office in fact supports the ministry's vigorously pursuing the Criminal Code remedies, and this bill does not in any way signal an abandonment of that. Is that right?

Mr Newark: Yes, I've not sensed that in any fashion whatsoever.

Mr Bryant: What does the office want?

Mr Newark: Enforcement of all the tools available in the tool chest, one of which I think is a new one right here, but not abandonment of it by any stretch of the imagination. It's why I included specifically that it might be nice if we used some of the funds currently available out of the victim justice fund to actually get the victim standard in place that included an obligation to help victims enforce restitution orders, which is not done now.

Mr Bryant: A $50-million surplus? David, you're going to be busy. Mr Tilson is going to be busy.

The Chair: Thank you very much for coming.

Mr Newark: Thank you.


The Chair: The next presenter is Hillel Gudes.

Mr Hillel Gudes: Good afternoon, Madam Chair. My name is Hillel Gudes. My friend here, Mr Andy Réti, will speak on my behalf.

The Chair: Oh, yes. Sorry, Mr Réti; I didn't recognize you.

Mr Andy Réti: Madam Chair and committee members, just like the previous speaker, we appreciate the opportunity to address you. We have also distributed copies of our brief.

As a brief introduction, please bear in mind that both of us are naturalized or, as you can tell, accented new Canadians, and very proud of it, I might add-ordinary little people. In fact, we're in the taxicab business. The purpose of our submission is to alert the distinguished members of this committee to the dangers of some aspects of Bill 155 in its present format. We will attempt to do so by highlighting the sections that we feel should be revisited, as well as some general comments.

You understand we are not lawyers, and if because of that we misunderstood or misinterpreted something in this proposed bill, we apologize.

We would like to make it clear from the onset that we are not against fighting organized crime. We are not speaking in defence of organized crime, but rather in defence of democracy. There is, however, a fine line between passing laws to fight crime, and subverting, however remotely, democracy.

Please allow me to make a personal comment, which is not in the deputation. I am a child Holocaust survivor. I am a Holocaust educator and I volunteer at the Holocaust Centre here in Toronto. In each of my presentations, I make sure that I address the students and the visitors with the following: if there was one lesson of the Holocaust, it was to speak up when you see something wrong. So please allow me to practise what I teach.

Hitler rose to power by democratic means. Once in power, he started by passing the infamous Nuremberg laws that led to the establishment of a police state, which enabled him eventually to do all those horrible things. By no means are we suggesting any comparison, God forbid; but we are trying to make a point by way of a historical fact. Our feeling, based on personal experience, is that if we have to choose between limiting democracy and living with organized crime, however reluctantly, we should choose the latter.

There is no doubt in our mind that there are good intentions behind the introduction of Bill 155. However, it is our opinion that it gives too much power to the government or the police. Therefore, it is incumbent on you, our duly elected legislators, to amend this bill to ensure that it protects all citizens from possible abuse by any government or the police. It seems to us that Bill 155, in its present format, could be used to fight more than organized crime.

The following are several examples of what concerns us. On page 5, under part III, subsection 7(1) defines "property" as "real or personal property, and includes any interest in property." That definition is so broad that it probably includes everything under the sun.

Subsection 7(1) on page 6 defines "unlawful activity" as "an act or omission that, is an offence under any act of Canada, Ontario or another province or territory of Canada." Again, we are concerned as to the broad scope of this bill.

We are concerned as to the standard of proof proposed in this bill as stipulated under part V on page 12, section 16. "Except as otherwise provided in this act, findings of fact in proceedings under this act shall be made on the balance of probabilities." This is, of course, is versus or opposed to "beyond reasonable doubt."

We are also concerned about subsection 17 (2), which states:

"In proceedings under this act, an offence may be found to have been committed even if,

"(a) no person has been charged with the offence; or

"(b) a person was charged with the offense but the charge was withdrawn or stayed or the person was acquitted of the charge." What happened to the idea of innocent until proven guilty?

We are also concerned about section 20 on page 14, which states, "No action or other proceeding may be commenced against the Attorney General, the crown in right of Ontario or any person acting on behalf of, assisting or providing information to the Attorney General or the crown in right of Ontario in respect of the commencement or conduct in good faith of a proceeding under this act or in respect of the enforcement in good faith of an order made under this act." Who is going to be accountable if this bill is used in an abusive manner?

We are also concerned about subsection 9(3) on page 7, which states, "An order under subsection (1)"-which is an order for the preservation of any property forfeited-"may be made on motion without notice for a period not exceeding 10 days." Are we not going to give the accused a chance to put up a defense?

To illustrate our concerns, please consider the following scenario: A homeless person rode his old bicycle to the supermarket. He left it outside, walked inside and eventually stole an apple. All along a policeman was watching him. When he tried to climb on his bicycle to run away, the policeman arrested him. He was charged with shoplifting but eventually was acquitted. Yet the crown asked the court for an order confiscating the bicycle. Is this a reasonable reflection of Bill 155? Or to put it in our background, the taxicab business, currently-and we are both Toronto cabbies-there are hundreds, if not thousands of illegal, unlicensed cabs coming into Toronto. Are you going to confiscate their vehicles for being in Toronto without a licence? Think about it. Is that really the meaning or spirit of this proposed bill?

We urge the committee members to have a strong, serious look at this bill. Please take our concerns seriously. Please make sure that amendments will be made to this bill in order to protect the average citizen and to preserve and protect democracy. Let us preserve the principle of innocent until proven guilty and the principle of proportionate penalty. Do not take the word of the Attorney General that this bill is good as it is and should not be amended, nor believe that there is enough protection in it for the average citizen. Right now there is not enough such protection from overzealous police or an overzealous Attorney General.

Again, I might add that we have been in this building trying to enlist your support against the autocratic former Metro Licensing Commission, and if you have the next two days, I could give you some stories, but we don't.

It is up to you, our elected members of provincial Parliament, to stand on guard and to ensure that democracy will not be subverted, however well-intentioned this bill is meant to be.

The Chair: Thank you, Mr Réti and Mr Gudes. Unfortunately, we don't have time for questions because, as individuals, you only had 10 minutes. Thanks very much.

The next presenter is Malcolm Cairnduff. Mr Cairnduff? Is Karen Selick here? Daniel Mader?



The Chair: I understand Mr McKeever of the Freedom Party of Ontario is here. Would you mind making a presentation now?

Mr Paul McKeever: No, that's fine.

The Chair: Thank you. You have 20 minutes.

Mr McKeever: Yes, and I've brought 30 copies of my presentation, as per the request. I should just add that I spoke with Ms Selick a few days ago and she did intend to be here. She planned to be taking the train in.

The Chair: I called her name. It's a little early for her. The only reason I called her name is because the next presenter is not here. We'll hear from you and then go back to see if she comes.

Mr McKeever: Sure. My name is Paul McKeever. I'm a lawyer in practice in both Toronto and Oshawa in employment law. I'm here as a member of the Freedom Party executive to make submissions on behalf of the party.

The Freedom Party of Ontario is a political party registered pursuant to the Elections Act. The Freedom Party's statement of principle is that every individual, in the peaceful pursuit of personal fulfilment, has an absolute right to his or her own life, liberty and property. The Freedom Party is in favour of laws that discourage the initiation of coercive physical force by any person against any other person, of the use of coercive physical force only in response to and as a consequence of the coercive use of physical force. Examples include laws that punish a person for stealing a person's property or causing physical injury to a person without their consent.

The Freedom Party strongly objects to Bill 155 in its current form. Some of the Freedom Party's objections are philosophical and some are legal, and they are set out in the following pages.

First, the philosophical objections: in considering the philosophical objections listed below, it's important to keep in mind that were it made law, Bill 155 would essentially allow a person to be punished without having committed any offence except the one which, as explained below, is actually implied by Bill l55 itself: the simple possession of property. In short, rather than being a response to the initiation of coercive physical force, Bill 155 would promote and legalize the initiation of coercive physical force. It would promote and legalize the commission of an immoral activity.

For hundreds of years, our legal system has recognized that every person has unalienable rights of life, liberty and property. Indeed, our criminal laws are designed primarily to protect those rights. Property in this context has not its formal legal meaning but its informal meaning: property refers to money and other goods, as opposed to services. Some people, including some Freedom Party members, believe these rights are God-given. Others believe that they are the result of utilitarian or objectivist philosophies. But one thing is certain: in our society, the protection of the right to one's property is necessary if a person is both to survive and to thrive. Indeed, the right of life is meaningless in our society if it does not imply or otherwise include the rights of property. As will be discussed below, under the "Legal Objections" section, it is our submission that Bill l55, were it made law, would violate the right of persons to their property.

The Freedom Party disagrees fundamentally with the notion that the moral righteousness or wrongfulness of taking another person's property by the use of coercive physical force depends upon who is so abusing physical force. Theft is theft, no matter who may be the thief. It is morally wrong for B to steal from C, whether B is Her Majesty the Queen, one of her ministers or simply one of the Queen's subjects. Moreover, it is no more defensible to commit a theft indirectly, or via an agent, than it is to commit a theft oneself. It is never morally defensible for person A to have person B steal person C's money for person A's benefit. That B may be Her Majesty or one of her ministers, acting on the advice of A's and C's elected representatives, does not somehow make the theft morally righteous.

The Freedom Party submits that it matters not to what purpose Her Majesty or her finance minister would put the property taken under Bill 155. A theft cannot be morally excused or justified by the theft's decision to use his booty for noble causes. Were a mugger to steal from one person in a dark alley but to subsequently give the stolen money to victims of crime, or to the police so as to prevent muggings, such expenditures could not negate the fact that the mugger's theft was morally wrong. Nor could the mugger's theft be made morally righteous by the fact that she, while mugging a person in a dark alley, held the title of Queen or finance minister, and, most certainly, the immorality of such a theft could not be negated were the mugging to occur in a well-lit courtroom instead of a dark alley. That Bill 155 would allow Her Majesty, through her Minister of Finance, to use the so-called special purpose account only for laudable purposes is no answer to the moral wrongfulness of taking a person's property by force without their consent.

History is rife with men of the people who have made their fortunes through crime but whose crimes have been excused or justified by the public because such men of the people have spent some of their ill-gotten gains in philanthropic ways. It is inexcusable for Her Majesty to join the lowly ranks of such cons and to seek an excuse or justification for the theft via a promise to spend the proceeds of forcefully taken property on such things as victim compensation and crime prevention. But that is precisely what Her Majesty will be doing if Bill 155 is passed into law.

Moving on to the Freedom Party's legal objections, there are certain points within the bill to which we think attention should be brought.

First, the term "unlawful activity" includes any offence, whether an offence under federal jurisdiction or under the jurisdiction of any province. The offensive activity or omission in question need not constitute an offence in Ontario at all. The term "unlawful activity" includes not only acts but omissions. Thus, as examples, a failure to file one's tax return, to file a party's election finances returns or to carry on business under a name that has not been duly registered under the Business Names Act is unlawful activity under Bill 155.

The term "proceeds of unlawful activity" includes not only property acquired as a result of unlawful activity but also property any part of which was acquired as a result of unlawful activity. For example, a bank account of $250,000 or a house purchased with such money is "proceeds of unlawful activity" if only $1 of that money was acquired as a result of unlawful activity.

The term "proceeds of unlawful activity" includes property acquired indirectly as a result of unlawful activity. Thus, as an example, property acquired via a business that violated Quebec's signage language laws would arguably be proceeds of unlawful activity. As noted above, the unlawful activity need not constitute an offence in Ontario.

A court may make an order allowing Her Majesty the Queen to take a person's property even without attempting to prove that the person was at all involved in an offence of any sort, except that implied by the bill itself, as I'll explain in a minute. Bill 155 would allow Her Majesty to take property that has never been involved in any offence at all. For Her Majesty to take the property, it need only be of the type of property that is likely to be used to engage in forms of unlawful activity that would involve the acquisition of property or the infliction of bodily harm. The most obvious targets, of course, are such things as money, because it is likely to be put to any purpose known to man, computers, firearms, communications equipment, boats, trucks, well-guarded or remote tracts of land etc.

Having looked at those particular sections, these are our legal submissions.

Bill 155 imposes not a compensatory remedy, but a fine. This is evidenced most persuasively by the fact that the term "proceeds of unlawful activity" includes property only a minute part of which was acquired as a result of so-called unlawful activity. Were the aim merely to ensure that no person possessed ill-gotten gains, Bill 155 would not seek to take legitimately obtained property as well. In Canada, fines are imposed only for the commission of an offence.

The offence imposed by Bill 155 is an absolute liability offence. The crown need not prove that the accused knew or intended to possess or own proceeds of unlawful activity or instruments of unlawful activity; the crown need not prove that the accused had mens rea. The crown need only prove that the accused possesses or owns the property in question.


Bill 155 would not require the crown to prove its case beyond a reasonable doubt but merely on a balance of probabilities, in other words, a more-likely-than-not standard. In Canada, the commission of an offence, even a moving violation, for example, must always be proven beyond a reasonable doubt. Thus, Bill 155 involves a colourable attempt to impose the more-likely-than-not standard or the balance-of-probability standard to convict persons of an unnamed, undefined, absolute liability offence without proving them guilty beyond a reasonable doubt and without proving they had any intention to possess or own proceeds or instruments of unlawful activity.

Freedom Party submits that this is not in accord with fundamental justice under section 7 and related sections of the charter.

It is noteworthy that, pursuant to section 462.37 of the Criminal Code, which is a federal statute, a forfeiture order of the sort sought by Her Majesty under Bill 155 can be obtained only when the person from whom it is taken has been convicted of an enterprise crime. Under the federal regime, it is expressly noted that a forfeiture order is a part of one's sentence for having committed an enterprise crime. Moreover, if the enterprise crime is not proven on a balance of probabilities to have been done in relation to the property in question, the property can be taken by Her Majesty only if the crown proves beyond a reasonable doubt that the property was nonetheless proceeds of crime.

Clearly, Bill 155 is a shameless and colourable attempt to circumvent the hurdles associated with the federal proceeds-of-crime regime. Indeed, a forfeiture order under subsection 3(1) of Bill 155 could be made under circumstances that would not allow Her Majesty to take the proceeds of crime pursuant to section 462.37 of the Criminal Code.

Freedom Party fully expects that if the crown attempts to impose liability on a balance of probabilities, its attempt will not survive scrutiny by the Canadian Charter of Rights and Freedoms, in particular, section 7 of the charter and the legal rights which serve to elucidate those rights.

Because legal proceedings under the bill would be commenced via the commencement of an action, the rules of civil procedure would apply. That being the case, an accused would be required to make full disclosure of all documents relating in any way to the offence and would be required to answer all relevant questions put to him under oath during examinations for discovery. The bill would require an accused to provide evidence against himself, rather than leaving it to the crown to collect evidence in the same way it is required for any other offence.

Freedom Party submits that this would violate an accused's rights under section 7 of the charter. Not only would the charter be violated by the absence of a requirement that an accused be proven guilty beyond a reasonable doubt, but the section 7 right to "life, liberty and security of the person" could be found to include, as a necessary aspect of the right to life or the right to security of the person, the right to property. In connection with the latter point, former Attorney General Flaherty's public statements that the charter does not protect property rights are, to say the least, premature. The Supreme Court of Canada did not conclude, in the leading on-point decision, which is Irwin Toy, that the charter does not protect property rights. To the contrary, it stated that it would be premature to rule out that security of the person encompasses some economic rights for humans but not for corporations. Moreover, the court had nothing to say about the scope of the right to life.

Freedom Party submits that there are strong arguments that the charter protects a right to property, which Bill 155 could not withstand were it made law.

As noted above, Bill 155 imposes a penalty for an offence which it chooses not to name. Specifically, the offence in question is the possession of proceeds of an offence or instruments of unlawful activity.

Freedom Party submits that such a law is criminal in nature. Indeed, Bill 155 would make section 462.37 of the Criminal Code redundant. Freedom Party submits that if the crown attempts to make Bill 155 law, it will fail on the basis that the criminal law is a matter falling under the exclusive jurisdiction of the federal Parliament.

Furthermore, Canada has a Constitution which is "similar in principle to that of the United Kingdom," as can be seen in the preamble of the Constitution Act, 1867, and is governed by the same crown that has agreed to the terms of the Magna Carta and the Bill of Rights. As evidenced by the crown's signing of the Magna Carta and decisions made in the crown's courts since that time, including Ontario's courts since the imposition of the charter or the coming into force of the charter, the crown has given up its power to take a person's property without immediate payment to, or the consent of, the person from whom the property was taken.

What I'm saying is that the Ontario courts have recognized that the Magna Carta is still in force and still part of our Constitution and that the common law still gives us a right to property.

If Bill 155 does not impose a fine, in other words, if it's not a punitive or an offence-oriented bill, then the crown lacks authority to act on the advice of the provincial Legislature to make Bill 155 law. Her Majesty doesn't have the power any more to take property without giving compensation, so the Legislature can't advise her to pass such a law.

Quite apart from constitutional arguments, it should be obvious to anyone that the threshold for the granting of a forfeiture order under Bill 155 would be so low, the scope of the terms "proceeds of unlawfu1 activity" and "instrument of unlawful activity" so wide and the possible value of forfeited property so high, that government will find it irresistible to seek forfeiture of property connected in no way with an offence. This is, of course, one of the points made to this committee or that will be made to this committee, I presume, in detail by Ms Selick, and we won't expand on those.

If there's any time and if there are any questions, I can-

The Chair: There's about two or three minutes, if there are any questions. Mr Tilson.

Mr Tilson: With respect to subsection 3(3), and that is the section that talks about legitimate owners-

Mr McKeever: Responsible owners.

Mr Tilson: Yes. Your comments about that issue, about seizing property, I think you gave the example of one dollar that may be illegal and the rest of it isn't.

Mr McKeever: Right.

Mr Tilson: Isn't there a way under this bill-at least I believe there is-to sever that?

Mr McKeever: The bill actually imposes a new duty on all people who own any sort of property that might be used in any sort of offence, be it a speeding offence or not filing one's party returns, that if they don't take all reasonable steps necessary to prevent the use of that property in the commission of any offence, then they are not entitled to have that property back.

Mr Tilson: Subsection (3) says the judge, "where it would clearly not be in the interests of justice," can make an order to "protect the legitimate owner's interest in the property." I believe that satisfies your concern, but you can tell me whether it does it or not.

Mr McKeever: In part II of the act, "responsible owner" is defined-I think it's "responsible owner." In any event, it's defined in such a way as to impose a duty on a person. Now, it may be that part I allows a judge in his discretion to award a legitimate owner-

Mr Tilson: A judge can protect that property. That's what that section says.

Mr McKeever: That's what it says, but part II does not give the judge that similar protection. In fact, it only gives the judge authority to return the property to the rightful owner if the rightful owner of the property, be it a rifle, a car or whatever, has taken all reasonable steps to prevent its use in the commission of an offence.

The Chair: Thank you. We really don't have time for any more questions of this speaker. Thank you for coming this afternoon, Mr McKeever.


The Chair: I understand Ms Selick is here. If you'd like to come forward. Sorry, we're a little late. One of our deputants isn't here yet, so we moved forward with the last speaker.

Ms Karen Selick: Good afternoon. My name is Karen Selick. I'm a lawyer in private practice in Belleville, Ontario. I also write a regular monthly column for Canadian Lawyer magazine, and I contribute occasionally, not regularly but from time to time, to opinion pages of the Globe and Mail, the National Post and various other newspapers. I'm here today at my own expense, not representing anybody else, just on my own time, because I think Ontario would be making an enormous and irrevocable mistake if it enacted Bill 155. I'm here to ask you, in fact to beg you, not to pass this bill and not to pass any variation of it.

I have my remarks prepared in written form and I will give them to Mr Prins to distribute afterwards, but I'm just going to speak here directly to you at this point.

I'm not here to tell you that this bill could be tweaked in any way or amended in any way that would make it OK. That's not my position at all. I think it's plainly and simply wrong from start to finish, and it simply must not proceed. I don't think there's anything you could do, any minor amendment, major amendments, that would make this OK.


I've actually written two pieces about this in the newspaper. One of them was in the National Post that appeared in December and one was in the Globe and Mail that appeared in January. I won't have time in the 10 minutes I've got today to go into everything I said in those articles. Some of you may have read them, but if you would like to read them again, I've posted them on my Web site. It's a very easy URL to remember. It's just my name, I've highlighted that in all the copies of my remarks today that are going to be distributed to you. I've put a special link on my home page to those articles, so if you would like to read further beyond what I can tell you today, please go to my Web site.

The most important thing I want to stress to you today is this: in my view, Bill 155 is one further step down the already slippery slope that Canada is taking towards becoming a police state. This bill will give the government a stake-a very big stake-in the continued existence of organized crime. Money is a big motivator, whether for individuals or for governments. This bill promises to pour money into government coffers. In effect, it will make the government a senior, silent partner to organized crime. Once government can seize the proceeds of crime, or assets suspected of being used in a crime, it will become addicted to that source of funds, just like any junkie. Then we'll never be able to repeal this law, no matter how much evil we see it doing, no matter how many police officers or judges it corrupts and no matter how many innocent people lose their houses, their money or even their lives.

You probably know that asset forfeiture has become big business in the United States since about 1984 when they beefed up their racketeering laws. Hundreds of asset seizure laws have been passed since then and literally thousands of property seizures take place every week-yes, every week. Many of these seizures are based on the flimsiest of suspicions, and in a huge percentage of cases the people whose money or other assets get seized don't even try to get their property back. They can't afford a lawyer or they can't afford to take time off work to go to court, so they simply throw in the towel. Every time this happens, the cop who made the bust gets some brownie points and he becomes emboldened to do it again.

Here are some of the grounds on which American citizens have had their property seized. One really common situation has been when they've been stopped on the highway for minor traffic violations or even for routine alcohol or seatbelt checks. Just imagine here in Ontario police stopping people under the RIDE program. They have a cute little spaniel with them, trained to sniff for drugs. Did you know that in the US and Britain, they've done studies that have shown that between 80% and 96% of all the paper currency in circulation has traces of cocaine on it? I've never seen any statistics for Canada, but I have no reason to believe it would be any different. In the US, 15% of the paper currency leaving the mint, leaving the US treasury department, straight off the printing presses, has traces of cocaine on it. So just turn those sniffer dogs lose at any RIDE checkpoint and there's a good chance they'll smell drugs in just about any car they care to target.

I wrote a letter about this bill to Mr Flaherty a few months ago and he wrote back to me on January 15, stating that the bill contains "an important number of safeguards." Foremost among these safeguards, he said, is "the requirement of court approval at every step." With all due respect to Mr Flaherty, I can only consider that answer to be a joke. Who says judges are any more impervious to the lure of money than police officers? The money doesn't have to be making a beeline directly into the judges' own pockets in order for judges to be tempted by this. Money going into the court system will mean they can hire more staff, have their offices redecorated, get upgraded notebook computers, get new courtrooms built, get salary increases or longer vacations. There are a lot of reasons why judges will be just as anxious as police officers to get their hands on the proceeds of organized crime.

But Mr Flaherty told me there's another reason I shouldn't worry about this bill. It's because, and I'm quoting exactly from his letter, "More importantly, the proceeds of forfeiture are first made available to victims." I have two problems with this answer. First of all, it isn't even true. The bill does not make proceeds available first to victims. There's a list in subsection 6(3) of the bill of five different uses to which this money can be put. While compensation to victims appears at the top of the list, this use is not given priority over the other uses; they all have equal status. Two of the five uses refer to giving money to the province of Ontario, a municipality or other public body. Then the fifth item lists some other uses that are going to be prescribed by regulation. I can hardly wait to see what those might be.

But even if we supposed that the money were going to go first to victims of organized crime, as Mr Flaherty said, unfortunately this still does not put my mind at ease because the truth is that most of the activities of organized crime either have no victims at all or have no victims who would be willing to step up to claim their so-called compensation. The largest single activity of organized crime today is drug dealing. Who are the victims here? Do we really expect someone to come cap in hand to the Ontario government and claim compensation from this fund because the marijuana he bought turned out to be oregano or, because he paid for a shipment of cocaine and it never got delivered, it had been seized by the cops?

What are the other major activities of organized crime? Smuggling liquor is a another big one. Who's the victim who's going to come and claim compensation here? Some guy who got cirrhosis of the liver by drinking too much untaxed booze?

Smuggling illegal immigrants is another big racket of organized crime. Who's the victim who's going to come and claim compensation here? Some Chinese refugee whose snakehead promised to get him to the US, but abandoned him here in Ontario?

Ladies and gentlemen, ask yourselves this question: what is it that the average Ontario taxpayer really wants the police force in his neighbourhood to do for the taxpayers? The answer is really quite simple. Taxpayers want to sleep soundly at night, knowing their houses aren't going to be burglarized. They want to be able to go out during the day to work, knowing they don't have to install an alarm system just to protect their possessions. They want to be able to walk down the street without getting mugged or raped. If someone commits a fraud using their bank account or credit card, they want the police to get their money back for them.

These are the things taxpayers are willing to pay taxes for, but these are precisely the things the police tell us over and over again they can't do for us. How many of you know someone whose house has been broken into? I'll bet everyone in the room does. What did the police say when they were called: "Sorry, there's not much we can do about it." A friend of mine recently had $16,000 stolen from his line of credit. It was probably an inside job involving someone from the bank, but what did the police say when he reported it? "Sorry, but for individual frauds we won't look at anything under $250,000 and, for businesses, the limit is $1 million."

The average taxpayer really doesn't give a hoot that someone's importing marijuana into the country. A huge percentage of average taxpayers have smoked pot themselves. Probably half the people in this room have tried it. But we can only afford a limited number of police officers and each of them can work only so many hours a day. We have to make choices about how best to deploy those police man-hours. The average citizen, I'm sure, would say, "Get the burglars and muggers off the street and forget about the guys importing drugs and alcohol."

It's bad enough that our police already demonstrate the opposite priority, but if Bill 155 comes into effect, they will have an additional incentive to divert their resources to crimes that taxpayers consider low priority, because the cops and the police departments and the courts are going to be among the people on the list who get to drink from the trough, once all those tasty crime proceeds start flowing in.

I wish I had more time to tell you what's wrong with this bill. I don't know how much of my 10 minutes I've used already, but I must be pretty close to the limit.

The Chair: It's getting there.

Ms Selick: Yes. I urge you once again to read the articles on my Web site. I will distribute my handout here. I urge you, please, don't proceed with this bill. Abandon this one. This is one US import we can do without.

The Chair: Thank you, Ms Selick.

Mr Kormos: On a point of order, Madam Chair.

The Chair: If you're going to mention you'd like some time for questions-

Mr Kormos: No, no.

The Chair: -because I'm going to allow that.

Mr Kormos: OK. Then I better ask for some time.

The Chair: Mr Cairnduff, I gather, is not here, and we do have a cancellation. I think there's some interest in asking questions. I'll allow maybe five or 10 minutes for questions, Mr Bryant.


Mr Bryant: Thank you for your presentation. I think it speaks for itself, and I appreciate that you put on the record that interested Ontarians can go on to your Web site and read further. Thank you for coming and thank you for making this contribution. I understand you're a citizen just coming here to speak your mind.

You raise a point-and perhaps Mr Tilson in his questions can respond-about who the victims are here who are in fact going to be compensated. Do I take it that it's your view that this is a façade, that there are no victims of organized crime who could get compensation from this?

Ms Selick: There might be the occasional one. I'm sure organized crime is into other things. They are into credit card frauds, for example, but I think you're going to have a very difficult time identifying the individuals who have suffered from this. Most people who are victims of a credit card fraud won't really be victims, because their credit cards are insured to a certain level. It will really be the insurers or the banks that end up having to pick up some of that tab that perhaps will have some claim on this compensation fund.

I just think this idea of compensating those victims in comparison to the other bad things that can happen with this bill, it's just not worth taking those risks because the other risks of this bill are so enormous.

Generally speaking, most of what organized crime does is what we call victimless crime. It's stuff that has been made a crime only because someone has chosen to take a vice and interpret it as a crime. People are there voluntarily engaging in these activities, voluntarily on both sides of the transaction.

Mr Kormos: I'm sympathetic to some of your arguments. I don't know. Again, we're going to be hearing from policing, but when you talk about if organized crime indeed is controlling things like women being transported so that they can be housed as prostitutes or working in strip clubs, that's where it's just sort of a little grey area.

But the concern expressed by Alan Borovoy earlier today was the standard of proof, that this uses-and it was spoken to in the presentation prior to yours-the civil standard on the balance of probabilities whereas a conviction for a criminal offence-thank goodness, because even with that high standard of proof beyond a reasonable doubt we've witnessed a tragic number of unjust convictions. Thank goodness we don't have the death penalty. You really haven't spoken about that part. Do you want to?

Ms Selick: I did mention those. In the first article that was in the National Post I mentioned that. I think you're really going to have problems with the constitutionality of this. In pith and substance this is criminal law. The statements that were made by Mr Flaherty and Mr Tsubouchi months and months ago, before this bill even came in, made it quite clear that this is directed toward criminal law, and I think you're going to have a big problem with that. Once it is criminal law, then yes, you have a problem with the fact that it's this lower standard of proof.

Mr John Hastings (Etobicoke North): Ms Selick, thank you for coming here today. I have read some of your articles in the Post. I would describe you as a champion of property rights in Canada. Would that be a correct depiction?

Ms Selick: I would be pleased to be described that way. Thank you.

Mr Hastings: Could you supply to committee clerk specific examples, if you have them, at a later date-I don't really want you to do an inordinate amount of work since you are a barrister who works on her own, and you've got to make a dollar like everybody else-in the United States under RICO or under similar state statutes that tried to get the forfeiture of property connected to criminal activities and any articles you've come across regarding the corruption of the policing function?

Ms Selick: I did mention some of that.

Mr Hastings: Yes, you did.

Ms Selick: In the first article I wrote about this in the National Post, I mentioned that. There's a very famous one in the US. It was a series of articles published in a newspaper that was then called the Pittsburgh Press. The name of that has now changed. I think these articles appeared in about 1993 or 1994, maybe even earlier, but a long investigative series about people whose property was being taken with very little grounds, people who couldn't afford to get it back.

In the National Post article, I think I mentioned the case of a man in California. He was quite a wealthy man, a multi-millionaire, whose ranch was broken into. It was quite clear they were deliberately hoping they could find drugs there so that they could seize this property. As it turned out, they killed him in the raid and there never were any drugs on the property. There have been people killed for this sort of thing. There have been all kinds of people who have lost property, lost houses because their child made a phone call, was dealing dope or something. The abuses have been horrendous.

In the US, they recently passed some amending legislation-I think it was in about March or April of last year-that was designed to deal with some of these abuses, but from what I've read, it wasn't very effective in dealing with the abuses-

Mr Hastings: By the US Congress?

Ms Selick: Yes. It got watered down along the way. That's why I'm concerned about the addictive nature of this type of legislation for the Legislature. Once they had this passed, then the battle to get it changed was horrendous. All these police associations came forward and said, "It's a wonderful thing, and you shouldn't change it." The amending legislation, the restricting legislation, was watered down severely, so that I don't think it did much good.

Mr Hastings: Do you have any examples, Ms Selick, of states, governments, the US government, the FBI or whatever agency you can think of in the literature or where I could come across some, where the people who had their property seized under these civil measures sued back, sued the state government, the state police or whatever agency-

Ms Selick: I'm sure there must have been litigation of that kind. I don't have any specific knowledge of any.

Mr Hastings: Do you expect that would be one of the other unintended consequences coming from this stuff?

Ms Selick: I'm quite confident that here in Ontario it will be, just because of the constitutional issue. People aren't going to take this lying down when there's that big, glaring gap there that they can take a run at it with. I'm sure here it will be a problem.

The Chair: Mr Kormos.

Mr Kormos: I just wondered, Madam Chair, whether as a matter of course the participants from out of town are advised of their right to claim for mileage etc.

The Chair: Yes, they are.

Mr Kormos: OK, fine.

Ms Selick: I wasn't advised of that.

Mr Kormos: Oh, well, I'm glad I raised it.

Mr Hastings: Yes, for mileage.

Mr Kormos: Before you leave, why don't you just speak to the clerk?

Ms Selick: Thank you.

The Chair: Thank you very much for coming in.

We do have a couple of no-shows. The next delegation is at 2:40, so I think we'll take a half-hour recess.

The committee recessed from 1407 to 1439.


The Chair: I'll call the meeting back to order. The next presenter is Mr Gene McLean, director of security for the Canadian Bankers Association. Mr McLean, would you like to come forward, please? You have 20 minutes.

Mr Gene McLean: Madam Chair, committee members, good afternoon. My name is Gene McLean. I'm the director of security for the Canadian Bankers Association. In this role, I am responsible for working with our member banks on the development and execution of strategies to prevent, detect and reduce criminal activity against banks.

Prior to joining the Canadian Bankers Association, I served with the Royal Canadian Mounted Police for more than 25 years. While with the RCMP, I was responsible for numerous investigations of organized crime and international frauds. I also occupied the role and office of RCMP liaison officer in England and Switzerland for a number of years.

On behalf of the banking industry, I'm pleased to be with you today to discuss organized crime against banks. I cannot comment on the remedies contained in the proposed legislation, as CBA's member banks have not yet completed their review of the bill in detail. However, I welcome the opportunity to provide you with an overview of the problem of organized crime against banks and to confirm the industry's commitment to prevent and protect bank personnel and customers from the effects of organized crime.

The Canadian Bankers Association is pleased that the Ontario government recognizes the need to better combat organized crime, which is indeed a serious problem. There are a number of criminal organizations in Canada. Many of them are active here in Ontario. Each year, criminal activities cost Ontario residents and businesses millions of dollars in losses. I'm here to discuss organized crimes against banks and how the proceeds of those crimes are used to finance other criminal activities, including the importation and distribution of narcotics, the sale and use of firearms and human smuggling, to name a few. These crimes filter down to where we live and should be cause for general concern.

I would like to note that Canada's banks have a long history of working with government and law enforcement to deter criminal activity against banks and to protect bank employees and customers from these crimes. Together, our efforts are effective, but we must be constantly vigilant in our fight against criminal activity, as these organizations are now operating globally and have access to vast resources and technical capabilities.

Money laundering, bank robberies, credit card fraud and counterfeit monetary instruments are a few examples of the types of organized crime against banks, their employees and customers. Bank robberies are the most visible form of crime against the banking industry, its personnel and customers. Bank robberies amount to approximately $5 million in annual losses. The industry, through the good efforts of law enforcement, combined with the deterrence, detection and investigation by the banks themselves, has a very high success rate in the apprehension of bank robbers: a percentile of 85% to 90%.

However, the banking industry's primary concern is the safety of our employees and customers. Where credit card fraud and counterfeiting may appear to the untrained eye to be victimless crimes, bank robberies often have a traumatic effect on our personnel and customers. In some cases, despite post-robbery counselling, employees and customers continue to suffer trauma for extended periods of time. Sometimes, depending on the severity of the robbery, they can suffer for years after the incident. This is hardly a victimless crime.

Credit card fraud is a sophisticated form of organized crime against banks. The industry is dedicated to the security of the credit card system and to protecting customers' credit cards, but fraud does occur. In fact, for the year ended December 31, 1999, losses due to credit card fraud totalled $227 million for the Canadian issuers of Visa, MasterCard and American Express. The use of counterfeit cards is the most common form of credit card fraud and accounted for 54% of the dollars lost in 1999. Thanks to the efforts of the industry and law enforcement, dollar loss figures have gone down from the $227 million reported at the end of 1999 to approximately $203 million for the 12-month period ending June 30, 2000.

Customers are protected from credit card fraud and are not financially liable for any fraudulent use of their cards. In addition, banks work to identify and prevent credit card fraud through various means. Banks contact card holders when transaction irregularities occur. For example, if you've never used your credit card to make a telephone call and this afternoon you find yourself without a quarter and use your card instead, this irregular transaction could be flagged and a representative from your bank would no doubt call to confirm that your card was not being used fraudulently by someone else. Similarly, the credit card fraud prevention and detection system would identify if your card was used in two different cities on the same day. Again, your bank, to confirm that your card was not being used fraudulently, would contact you. Also, bank customers are normally contacted if their credit card has been compromised in a known fraud.

In addition to these fraud prevention and detection efforts, the banking industry, in conjunction with the credit card plans, is continually working on methods to improve credit card security by reviewing existing security features and examining possible new solutions, such as secure chip transactions. Certainly, the banking industry invests millions of dollars in sophisticated fraud detection systems, and the various processes are reviewed on an ongoing basis to ensure that our prevention and detection methods are current and effective.

The banking industry also works closely with law enforcement, governments and the legal system to deter criminal activity against banks and bank customers. A recent result of this co-operation was the arrest of several people in Vancouver who were part of an organized crime group in one of the largest counterfeit credit card operations in North American history. This past January, Vancouver law enforcement seized equipment and credit card data used to produce thousands of counterfeit cards with a combined possible credit exposure of $200 million. The crime syndicate recruited employees at several restaurants, gas stations and other establishments in the Vancouver area to skim the credit card data of thousands of unsuspecting customers. The credit card data was then used to manufacture counterfeit cards that were distributed to cities across North America and as far away as Brazil, Taiwan, Singapore and Saudi Arabia.

The production and passing of counterfeit monetary instruments is another form of organized crime against banks. As you may have heard in the news, just last week an organized crime group attempted to secure a letter of credit for counterfeit monetary instruments, bearer bonds, with a face value of US$25 billion with a Canadian bank here in Toronto. The RCMP credited the banking industry with good detection processes that prevented this fraud and enabled them to apprehend the criminals.

The banking industry, working in co-operation with government and law enforcement, is effective at preventing and protecting banks, their personnel and customers from a great deal of organized crime. But crimes against banks do occur and take many forms, and while some view large-scale organized fraud as a non-violent, white-collar crime that does not impact on ordinary citizens, law enforcement experts indicate that these monies are used to finance other criminal activity, much of it of a violent nature.

These crimes affect all of us where we live. The multi-millions of dollars defrauded from banks on an annual basis becomes foundation money to finance further criminal activity, such as the importation and distribution of narcotics, the sale and use of firearms, human smuggling and prostitution, to name a few. These crimes filter down to our neighbourhoods and, according to law enforcement, add to the growing violence in our streets that is reported on a regular basis.

The Canadian Bankers Association is pleased that the Ontario government recognizes the need to more vigorously combat organized crime. The banking industry looks forward to ongoing co-operation with government, law enforcement and the legal system to prevent and protect bank personnel and customers from criminal attacks against banks.

On behalf of the Canadian Bankers Association and the member banks, I would like to thank you all for your attention.

I should have introduced Mr Michael Green from the CBA at the beginning, but he and I are here today to answer any of your questions.

The Chair: Thank you, Mr McLean. We have about six minutes left for questions, starting with Mr Kormos.

Mr Kormos: What is down the road, in terms of being planned, to control credit card fraud? I'm talking about the way cards are manufactured. As I understand it, they can be reproduced with similar types of machinery. What's being looked at? Are photo credit cards being looked at? What's being looked at to respond to that?

Mr McLean: What's being looked at, next generation, would be an encrypted chip card, to protect the authorization and transaction on cards, which is designed to prevent the counterfeiting or skimming, as it's called, of the mag stripe, which is the back of the credit card, where the data is. So a chip card or a smart card will be the next generation of card that we would see.


Mr Kormos: When we talk about organized crime and organized criminal activity, I suspect that means several things to as many people. What are you talking about when you're talking about organized crime, as compared to disorganized? I'm being silly, but what are you talking about when you're talking about organized crime?

Mr McLean: When you've got the latest statistics, ending June 30, 2000, about $203 million in losses on credit card fraud, 53% of that is counterfeiting or skimming. This is done with sophisticated equipment and people with a certain knowledge. These people come together in an organized activity to conduct this work; it's not something that's done by somebody in their basement at home at night. So there is an organized activity to that. These criminals have used this process to generate some funds that they then can use for other aspects of criminal activity. Again, it's not necessarily a commodity; they're just looking at an opportunity to make money.

Mr Hastings: Mr McLean and Mr Green, thank you for coming in. I assume you're in touch with the managers of security in the different credit card companies across our country.

Mr McLean: Yes, I am.

Mr Hastings: As far as you know, have they adopted the most effective, up-to-date, most sophisticated security methodologies to reduce fraud?

Mr McLean: What I can tell you is that we meet on a regular, ongoing basis and we discuss best practices. Obviously, it's an ongoing, continuous review of our systems and our best practices. We look at this as a very non-competitive issue: criminals will attack one bank or the other or one card or another. They really have no customer loyalty and will attack more than one institution. So we work very closely together to ensure that from an industry perspective we're all on the same page and adopting best practices, with the best systems in your own networks in place.

Mr Hastings: So as far as you're concerned, they do have the most current and up-to-date technological security?

Mr McLean: Without knowing each system intimately, I would say yes, that everyone is working in best practices and the best ways of detecting fraud with fraud detection systems in place to both deter and detect and prevent fraud.

Mr Hastings: You say on page 3, "Customers are protected from credit card fraud and are not financially liable for any fraudulent use." Surely you're not telling me that I believe in Santa Claus, because inevitably is it not true that the consumer will pick up the cost of your fraud, whoever the fraudsters are, in any given year; that the eventual cost, whatever it is yearly, gets translated down to the individual consumer? He or she doesn't know that there's an additional amount; the percentage is probably encapsulated in the monthly charge. They get you back for the money you lost.

Mr McLean: What I can say to that is that obviously there's a cost to doing business, and fraud is obviously part of that formula. From a business perspective, I wouldn't be able to answer that. My role is security, and I couldn't comment on that.

Mr Hastings: Could Mr Green, perhaps, or have we gone over?

The Chair: I'm sorry to have to tell you that.

Mr Michael Green: If I could just make one very quick comment, Madam Chair. Certainly when you talk about credit card business, it's a very, very high-volume business, hence the loss ratio. Certainly the pricing on a credit card is a bit higher than a normal loan, simply because it's unsecured, high-volume business.

Mr Bryant: Thank you for coming. I understand from your comments that you had said basically the association wasn't going to comment yet on the remedies contained in this bill. How are the victims of organized crime that you've discussed going to be assisted by a remedy that targets Ontario property holders if in fact, as you described, organized crime can just set up shop across the border? In other words, how are these victims going to be assisted by a bill that only deals with Ontario property holders?

Mr McLean: Again, I can't comment on that because we and the member banks certainly haven't reviewed the bill in detail. I guess until that time arrives we couldn't provide a proper response to that.

Mr Bryant: Given your experience, could you talk about the international aspect of organized crime?

Mr McLean: International organized crime is truly that. It really is global and they can be situated anyplace and attack systems or individuals across borders and around the world. I guess what we're trying to do, certainly within the banking industry, is to develop a very high-level security protection system that protects people personally and their assets.

Mr Bryant: Just to confirm, you work with other organizations, obviously, across the country, but in other nations as well?

Mr McLean: We work internationally.

Mr Bryant: Right. All my questions have to do with the bill, so I'll just thank you for coming.

The Chair: Thank you very much, Mr McLean and Mr Green, for coming this afternoon.


The Chair: The next delegation is the Toronto Police Service, Chief Julian Fantino, Staff Superintendent Rocky Cleveland and counsel Jerry Wiley. Good afternoon to you.

Mr Julian Fantino: Good afternoon.

The Chair: You have 20 minutes in which to make your presentation, Chief, in the hope that we can also ask some questions in that time.

Mr Fantino: Thank you very much.

As chief of police of Canada's largest municipal police service, I and my colleagues appreciate the opportunity to speak to you about Bill 155 and what we believe to be an issue that is being addressed here, and that is the whole aspect of public safety and security and as such relates to organized crime.

It is a well-established fact that organized crime is profit motivated and that if you take the profit out of organized crime-or crime generally, but in the context of this discussion organized crime-you have in effect cut the head off of the dragon and the body, hopefully, will then die.

Unfortunately, measures taken at the federal level at this point in time to combat organized crime have been, mostly, ineffectual. Even though the battlefield in the fight against organized crime in the main falls within the jurisdictions of municipal police services, not only in this province but in this country, oftentimes the views and advice of police leaders in those very municipalities where organized crime is very much impacting communities and flourishing have all too often been discounted or considered irrelevant in the debate.

In Ontario, we have in the law enforcement community the people, we have the talent, we have the will, and we certainly have the desire to fulfill our public safety mandate, and that includes, of course, tackling the most intricate and intimate and most difficult challenges that are posed by an ever-growing, ever-sophisticated organized crime network that is global in nature. I believe as well that there is no question in our resolve to do everything we can within our scope and our mandate and within the parameters of the law.

But to paraphrase a Winston Churchill comment, someone must give us the tools to, in effect, do our job. At the present time the tools available to us are inadequate and we are sadly lacking in organized-crime-specific legislation and efficient justice system procedures which would enable us to effectively disrupt and dismantle the entrenched and sophisticated organized crime enterprises that in essence victimize all of us in one way or another: everything we buy, everything we use or acquire, every service is well impacted by the added costs that are being incurred because of the impact of organized crime. That goes right down, as well, to the quality of life that is available to every citizen of this country, this province, this city and certainly neighbourhoods and how they're impacted.

If I can talk about crime and disorder for instance, some people don't believe there is a link between that which happens at the community level and that which has a direct link back to organized crime.


The one example I can make that is probably most evident to all of us is the whole issue of drug distribution, the impact of drugs in our community and our society on our children. One has to believe, as I do from experience, that the drug subculture operates at a very high international, global level. Those who import, manufacture, distribute drugs at the high level obviously have a profit-motivated endeavour. That then, of course, trickles right down to the community level. The most vulnerable communities, the most vulnerable people, are then impacted by what goes on, and much of that is initiated by the ruthless profits that are made by organized crime enterprises. The victims in all of that, as I stated earlier, in a very direct sense are all of us as citizens, and more particularly the most vulnerable components of our community, neighbourhoods that by virtue of their conditions are somewhat disenfranchised. Then there is all that residual crime that is associated with the whole drug subculture. All of that has a direct link back to organized crime.

That is why, although this piece of legislation may not be perfect in every sense, nor will it, of course, deal with every eventuality and every issue, nonetheless I am pleased that the government of Ontario has taken the initiative to provide law enforcement agencies and communities and all of us as a society with an added piece of legislation, an added tool to help us take the profit out of organized crime.

Granted, we can dwell on what the bill can't do. I would like more to dwell on the things that it can do. Everything that the bill can do is a tremendous help to us. It lifts our spirits and it helps us focus on the issues that are very critical to us, which is to make a powerful statement with legislation that hopefully will attain the desired results: to absolutely make profitable illegal activities a non-profit activity. So taking the profit out of crime, as this bill endeavours to do, is very important.

Bill 155 provides a method for the forfeiture of assets which have been obtained by unlawful activities. It has a number of advantages from our perspective, from a policing point of view.

First and foremost, it is aimed at the profits of organized crime and it has the potential of addressing that. As I said earlier, taking the profit out of organized crime is essential to the war on organized crime.

Secondly, Bill 155 is structured so that the profits from unlawful activity are seized through the use of the civil rather than the criminal process. It is not a criminal trial process; it is a civil asset process. The use of civil lawyers and associated professionals in carrying out the provisions of the bill, with a minimum of police involvement, will free up scarce police resources to do other, much more needed work in the trenches for our people.

Thirdly, the bill provides a mechanism for compensating persons who suffer monetary loss or other damages as a result of unlawful activity.

Most importantly from a law enforcement perspective, the bill provides a method of preventing those persons who engage in unlawful activity from keeping property that was acquired as a result of that unlawful activity. In other words, ownership and use of property obtained through illegal means does not constitute lawful colour-of-right ownership.

Finally, the act recognizes the need to compensate municipalities for losses-that is important to us-for the expenses incurred in the investigation and enforcement of this law, and presumably some of the proceeds then derived can be directed to deferring the expenses of police services.

There are a few other good points. It's important to also appreciate that through this bill there's a very public recognition by the government of the day that there is a need to address this issue. There's a recognition that there is independence of the police in this regard, and the criminal process will take precedence over the civil process. The procedures will be developed to keep the criminal and civil processes separate and, as I understand it, the issue of criminal information will be protected.

The provisions of the act which are, I suppose, somewhat in debate I can cite. Those are that proof is on balance of probabilities and not beyond a reasonable doubt. There seems to be an issue that there does not have to be a conviction or even a charge laid before the act can be invoked. There is the intent in conspiracy, that one of the parties knew or ought to have known that the activity would be likely to result in injury, for instance. The act is very broadly worded and does cast a wide net. The bill will face, from what I understand, some challenges, but again that's a given with any new piece of legislation, that there always are certain aspects that need to be ironed out and fine-tuned. We welcome the opportunity to participate in that process as well, such as we're doing here today.

In closing, I would like to say again that the government should be applauded for its initiative in creating this legislation to take the profit out of organized crime. It makes good moral and ethical sense. It's the right thing to do. It is a much-needed and long-overdue measure which has been, I believe, neglected at the federal level. Our goal should not be to wipe out organized crime; its international nature precludes that. Instead, the goal of an organized crime strategy should be to make Canada the absolute worst place in the world for organized crime to operate. I believe this legislation is a giant step forward in achieving that goal, at least in the province of Ontario.

The Chair: Thank you, Chief Fantino. We'll turn to the government side. Mr Tilson, you have about three minutes.

Mr Tilson: Thank you for coming. The issues that have been raised, particularly in the media lately, of stakeouts of police detachments and threats to reporters and murders-we had former speakers in the banking business talking about the increase of credit card fraud, a whole group of things which I'm sure you could tell us a lot about and which we don't have the time for, unfortunately.

Yet we have had some people come to us-one of the earlier speakers this afternoon who came to us, a person who writes, said, "The impact on the average citizen-they're not really concerned about those things." We're talking about the average person with a credit card, because they call up the credit card company and they're protected and they don't really get involved in the stakeouts of police detachments. Dogs can smell drugs on all money. You know what I'm saying? She said there's not really a great deal that you can do.

My question is, talking specifically about the impact on the average citizen-I don't, quite frankly, agree with her, but talking about that-how can we build community support for initiatives like this to fight organized crime generally?

Mr Fantino: To begin with, I'd like to make the absolutely truthful statement that organized crime is in all of our pockets. It impacts all of our lives and we're all threatened by it.

There's also an element of violence associated with what we're talking about here. It isn't just the impact on the financial aspect, losses and so forth. We have real living, breathing, innocent people being killed. The impact of violence, which I didn't even address in this particular presentation, is all part and parcel of what organized crime is all about: the predisposition to do whatever it takes to acquire illegal profits. It's all profit motivated.

I think what we need to do and probably have not done very well in the past is articulate the issues well enough to receive the ear of the public, and in some cases the policy-makers, not only to this very significant economic threat to our nation but the whole issue of public safety as well. They go hand in hand.


A lot of the violence we experience front-on day in and day out is not insulated or isolated from other causal impacts and other factors. A lot of it is the turf wars over drugs, distribution networks, fighting for basically blocks of sidewalk where business is done.

The out-and-out assault on vulnerable communities: look at the distribution of crack cocaine, for instance. Where does it most impact communities? The most vulnerable citizens of society. Who is doing this? I can guarantee you that there's a direct link back to organized crime. Why are they doing it? Because of the profits. I can go one step further: it's because of a very soft system of justice that we have in this country that so many of these things have been allowed to flourish.

Mr Bryant: Thank you for coming. As a result of downloading, there may be a situation where you're going to have to try to get by with less, not more, which is what you need to fight organized crime. Can you talk a little bit about why it is so expensive for law enforcement to tackle organized crime and what's different about it that people might not be aware of?

Mr Fantino: That's a very good question, actually. We're talking about very sophisticated activities that are global in nature, greatly enhanced by world travel being what it is and the use of technology. But more than anything else, I believe, is the extraordinary profits that can be realized with very little, if any, fear of consequences. So you have a significant imbalance with regard to our ability as law enforcement people to tackle those issues.

It goes to organized-crime-specific legislation, or the lack thereof. It goes to our ability to sustain long-term, prolonged investigations to dismantle these organizations and not just tinker with them; our ability to work with our colleagues not only in Canada and Ontario, and certainly in Canada, but on the international playing field, if I can put it that way.

You're quite right: it's all resource-difficult situations for us. It's all labour-intensive work. The technology piece is very difficult, as is the ability to sustain long-term investigations that in effect will dismantle these organizations, which I think is the most effective way to do prevention anyway.

Having said all of that, the problem we have is one of competing interests and agendas and also mandates. At the very same time, we have to deal with this extraordinary demand on us, this very serious public safety issue, we also have the constant demands for service otherwise: in the city of Toronto, about 1.8 million calls for service annually that probably have no relationship to this at all, other than the after-effect.

So you're quite right, sir: it's a resource issue, it's a legislation issue and it's also a policy issue, our willingness as a nation, if you will, to tackle this issue. It can't be done at the local community level; it can't be done at any one government level. We all have to believe that this is a very significant threat that impacts all of us.

Mr Bryant: Are we falling behind internationally in this sense? It has been said that Canada is a safer haven-

Mr Fantino: I think I said that yesterday.

Mr Bryant: It has been said, then. Between the lack of intergovernmental co-operation and in terms of provincial and municipal downloading, in terms of the changes to the federal spending power as well: in all that, we're falling behind. Can you talk about the importance of intergovernmental co-operation and how these competing agendas are causing us to fall behind?

Mr Fantino: The way I look at things is, all of the things we do, be it in law enforcement, be it in governments, be it wherever, when it comes to dealing with public safety issues, greater-public-good issues, everything should be transparent. We all need to work together. That also goes to us as law enforcement people. We need to work better together: the ability to share information, the ability to join in tackling critical strategic targets that will attain the hoped for result, which is to dismantle these organizations. We all have to revisit what it is that we do and how we're doing it. We all have to look at this issue as a shared responsibility.

I can just give you this example. For many years we've been talking about community-based policing. As you know, it has been a glorious model for how things should be done. I would like to suggest that we now need to talk about community-based government, where everyone comes to the problem-solving table and everyone has a responsibility and an accountability for the outcomes. No longer can we defer to other people to do the things that need to be done collectively and co-operatively-integrating our collective resources, the policy-making, the laws-the law enforcement community, all of us, coming to bear on this issue because, as I stated earlier, it's foolishness for anybody to believe that we're not impacted severely by all of this.

In some places-the outlaw biker movement, for instance, in Quebec, the body count there is well over 150 killings. In that there have been innocent people killed-the young DesRochers boy, 11 years of age, about six years ago. So we're all impacted by it and we're all concerned about it. I certainly am. If that were not the case, I wouldn't be here.

Mr Kormos: What is the Toronto police services' experience with the existing Criminal Code provisions for forfeiture of proceeds of crime?

Mr Fantino: We do use it and the experience is, to the extent that we can, we are embracing every piece of legislation to go after the proceeds. But that's a criminal process and there are a lot of complications there. As well, it's labour-intensive, and there are all kinds of issues of liability and being able to effectively and quickly seize the assets before actual due process is concluded. This legislation has been modelled elsewhere and it's through civil process. In other words, we don't have to wait for all of the other things that we need to do with respect to the criminal process.

As I stated earlier, Mr Kormos, and I think it's a fair statement on my part, this does not have the ultimate answer for us. It's just one more tool, and we welcome the opportunity to use any tool to, in effect, accomplish the lawful outcome, to take the profit out of crime.

Mr Kormos: I'm down from Niagara region, and our Chief Nicholls is coming up here over the next couple of days. Unfortunately, I'm not sure, but I haven't seen the OPP CIB anti-rackets on the list of participants. The press earlier today was suggesting that somehow Niagara is unique, that Niagara has special problems, and I felt a little bit of resentment about that. I wanted to reassure people.

We're all impacted, and I agree with you on your observations about crime and organized crime. And you heard the bankers' association talk about organized crime from the broadest definition of "organized," literally. Crime that is organized as compared to literally disorganized crime, the individual who goes out there and commits a crime. Who should we be concerned about? What is the organized crime? You talked about bikers and that's high-profile in the news. Who should we, as a community, be worried about when we're talking about organized crime?

Mr Fantino: We have to do our own homework with regard to picking priorities or targeting priorities. The whole issue of organized crime is something we need to tackle, period, because it's commodity-driven. It doesn't really matter what the activity is; it's wherever there is money to be made. One day it will be drugs, the next day it will be the sex trade, the next day it will be extortion, and on it goes. There is an ebb and flow of activities now, so you can't say that we will only deal with this one entity who may be a gang of criminals who are, for instance, committing frauds with fraudulent credit cards while that activity may in essence be also funding a whole lot of drug-dealing activities. In other words, it's all interconnected. My suggestion would be that we obviously need to target; we need to do that strategically. We need to do intelligence-driven kinds of investigations. But if you start attacking it, at some point there's a vulnerability that the house of cards will and in fact has folded many times.

With regard to Niagara, I don't know where the bad rap on Niagara has come from.

Mr Kormos: Not from me.

Mr Fantino: Niagara is no less and no more impacted than any of us. I can tell you that with some authority.

The Chair: Thank you very much, Chief Fantino, for coming this afternoon.



The Chair: The next presenter is Dr Margaret Beare, of the Nathanson Centre, Osgoode Hall Law School.

Dr Margaret Beare: I thank you very much for the opportunity to come and speak to you today. Unlike Chief Fantino, this piece of legislation does not lift my spirits. I guess I'm somewhat surprised, in the sense that my thinking is that the hearing is about a piece of legislation that's specific to one kind or one strategy, as opposed to all of the other strategies against organized crime. It is not a hearing to emphasize the seriousness or the gravity of organized crime. At the Nathanson Centre, we accept the fact that organized crime, or crimes of all sorts, are in fact serious, but what seems to be happening recently is that virtually any and every additional piece of power, legislation, resource, whatever, is sold to us under the umbrella of an ever-growing threat of organized crime. Somehow, if you make that threat big enough, you can justify whatever you're saying underneath that rhetoric. I find it distressing because from the point of view of the Nathanson Centre, we want organized crime to be taken seriously, but we don't want it to become the fodder for what we would argue in this case could be much worse than the situation it's meant to correct.

I know you've had people come in all day long and you probably have heard a lot of the points I am making. I have just handed out to you a sheet of paper that says that I'm going to address very briefly four key issues, four issues that I think are particularly important.

First of all there's this notion of the creeping erosion of our protections. I had officials from the Ontario government call Osgoode and virtually gloat that the beauty of this is that you didn't even have to charge the person. That is the beauty of civil forfeiture: you don't even have to charge the person. In fact, as your legislation says, even if the person is acquitted of the charge, you can still go after them civilly. This is based very firmly on the belief that "We know who is guilty; we just can't prove it." As you've all been reading in the newspapers in the last number of days, even the Supreme Court of Canada has come to the conclusion that no, sometimes we don't know who is guilty, even though we really think we do. So I am concerned with the potential abuses that would seem to be built into this.

One of the people I talked to, a supporter of the legislation, used the example of telemarketers as being something that is very serious, definitely ruins large numbers of vulnerable lives, and that the civil forfeiture could be used to go after. When I said to them, "Yes, but if you know who these people are, why then would the police not be building criminal cases?" The answer was that it's hard to get the police to prioritize some of those kinds of criminals and some of those kinds of criminal activities. In fact, Chief Fantino just supported that notion when he said something to the effect that, "This allows the police to get on with the much more needed work of the police."

To me, that is faulty reasoning. If we're bringing in a powerful piece of legislation like this and then we're justifying it on the basis that we can then allow the police to get on with something that's more important, it doesn't stand up, as far as my thinking goes. It has been compared by colleagues to quasi-criminal legislation, in the sense that it allows Ontario to do via civil legislation that which, in terms of jurisdictional divisions between the federal and provincial government, could perhaps not normally be done.

Chief Fantino eloquently talked about the powerful organized criminal that you would be stripping the proceeds from. Experience in other countries, and somebody here asked about experience in other countries in terms of the kind of legislation, tells us that civil forfeiture tends to go after the most vulnerable. You do not go after the person who has the very expensive, costly lawyers and who could sort of turn the case back upon the justice system. You tend to target the most vulnerable. So again, in terms of dismantling organized crime, yes, we'd all like to "dismantle" organized crime; that isn't the issue here. The issue here is the use of civil forfeiture to do it.

I guess I'm particularly excited around the notion of the hypocrisy of this bill. The rhetoric gets all confused. We talk about taking the proceeds away from organized crime as if Ontario has just had a brand new notion that this is the way to dismantle organized crime. Yes, taking the proceeds away from crime is an excellent way to hurt organized criminals, but fortunately we have had, as Chief Fantino acknowledged, criminal proceeds-of-crime legislation in place since 1989. Further, Ontario is the province that tends to use it less than some of the other provinces, and they use it less for a very real reason. They use it less because it requires that the Attorney General of the province sign an undertaking to take responsibility in those cases where a mistake is made, in those cases where somebody's life is unfairly disrupted.

Again, the beauty of this legislation, as it appears in draft, is that "No action or other proceeding may be commenced against the Attorney General, the crown ... or any person," blah, blah, blah, based on sort of a "conduct in good faith" clause. Chief Fantino acknowledged that there were certain liability things that hindered the use of criminal forfeiture, and he's absolutely right. Those liability things are not part and parcel of this legislation, and I would argue that it's to the detriment of the legislation that that is so.

The need for this legislation is based in part on the summit that was held. I find the Lessons Learned document a bit upsetting from the point of view that critics were not invited to that summit, so it was not an open debate about what the legislation might mean. To some extent it mimics the United States experience and yet, as we know, at least at the federal level, the United States is backing away from some of the injustices of civil forfeiture.

I think that from a police department's point of view, there should be some concern about this legislation. Looking at experiences in other places, we see not only the biasing of justice but also the corruption of police as being associated with this kind of legislation. Now, a supporter of the legislation might say that's only in those other jurisdictions because they directly get the money back. Then again, to my surprise, I guess, because I had heard all the rhetoric about how victims' groups are getting it in this legislation, I read in the legislation and in the draft release that the money could also go back to pay for "programs that prevent victimization by organized crime." As I kept reading, "prevent victimization by organized crime" struck me as money going to the police to help cover the costs of their organized crime enforcement. So there is a vested interest in what will be the quick, simple seizure, and, as I said right at the very beginning, the beautiful part of it being that you don't even have to charge the individual.

Those are the concerns I have with the legislation. My concerns are backed up by the fact that I think we have in place powerful legislation. Unlike Chief Fantino, I would argue that that powerful legislation is not being fully used at present, and there I am talking about the criminal seizure of the proceeds of crime. I am fully in support of the idea that taking the proceeds of crime away from criminals is perhaps one of the best ways to tackle this kind of criminal activity, but it's already on the books and it requires that a person be found guilty. Thank you very much.


The Chair: Thank you very much, Ms Beare. We have about three minutes each for questions.

Mr Bryant: Thank you very much for coming. Are you able to say whether or not the federal provisions were used in Ontario more before 1985 than after 1985?

Dr Beare: Is that 1985?

Mr Bryant: Sorry, 1995.

Dr Beare: No, I can't tell you. All I know and my understanding is that even to the present it is not used in Ontario as much as it is in BC and in Quebec. It takes a while for any of the provinces to get up and running on a new piece of legislation; 1995 would have been fairly soon. But the answer to your question is no.

Mr Bryant: One of my concerns is that this is now being pushed off to the civil courts and there has been no compensation, if you like, or no addressing of the resource needs of the civil courts, which are already backlogged, of course. Do you have any concern that this is just pushing the problem off into another court and that it should better be pursued in a criminal court?

Dr Beare: From a resourcing point of view in terms of it being shunted off to civil court, no, I don't know anything about that. It is a whole area that I do not think ought to be shunted off to the civil court. The resources that are seized might conceivably be used to help provide some of the resources for the concern you are discussing. I just think it's dangerous to be shunting this off in that direction.

Mr Bryant: Lastly-or maybe lastly-can you talk a little about how the United States is moving away from this type of legislation.

Dr Beare: There are three or four aspects that they brought in at the federal level, and perhaps some of the states are picking up on the federal level, but a lot of the states have not; they've kept it wide open. One of those conditions, and in fact it's the only one I can think of right now, is an important one: it's the reverse onus. They put the onus back on the federal government to prove that in fact the seized items were the proceeds of crime, whereas before so much of the violation hung on the fact that you seized the product and then made the person prove otherwise. That is what has been reversed at the federal level.

The Chair: Last question.

Mr Bryant: We heard before, in terms of the presentation from the ministry, I think I'm right to say, that there is no reverse onus in this legislation. Do you agree with that?

Dr Beare: As I understand it, the items are seized; the person has to argue why they ought not to have been seized.

Mr Bryant: And that's a reverse onus.

Dr Beare: I think so.

Mr Bryant: It sounds like it.

Mr Kormos: This whole concept of organized crime has been tossed around and, as I said a few minutes ago, depending on who's presenting, it seems to be a different thing. If you want to use biker gangs, you can use biker gangs, rackets, the whole nine yards. Can you help us, then, in terms of what is organized crime in Ontario, as you understand it?

Dr Beare: Oh, no.

Mr Kormos: I only have three minutes and I want to ask you something else.

Dr Beare: I guess the only thing I can say to that is that if I were arguing for this piece of legislation, I would be arguing for it from the point of view of serious financial frauds. Again, I'm sure a lot of the speakers who spoke would have called that organized crime. I've increasingly come to the conclusion that organized crime is the umbrella protection-intimidation-extortion structure, whereas the activity is very often, unlike what we often hear, individual criminal entrepreneurs doing something serious and bad. This legislation, I would argue again, even if you didn't worry about all of the dangers of it, might take money away from these individual, serious criminal entrepreneurs; it is not going to be dismantling anything.

Mr Kormos: If you had been consulted about what this or any government could do to develop a strategy to really take on organized crime, what would you have told the government?

Dr Beare: I would have said what I've said on a number of occasions: use the legislation that we have; make up for some of the cutbacks in police resources that have been going on and now are sort of being rectified in some jurisdictions. That was a serious situation. The police really were cut to the bone. A lot of good work at fighting organized crime, I would argue, happens at the street level by traditional police work doing good, traditional policing. You need to have adequate police resources to do that. Have that coupled with criminal forfeiture and I think you're OK.

The Chair: One more question.

Mr Kormos: In that regard, I'm listening to people and my sense is that if you really are-maybe it's just my TV imagination running rampant-some huge crime lord, and this law is passed, you're going to make sure your assets are wherever people like that put them: Cayman Islands, not to be unfair to Cayman Islands. Reference has been made that all the little operators, the little nickel-and-dime dealers-that's not unfair-are going to be the easy targets for this type of legislation. Is that a fair observation?

Dr Beare: It certainly is my belief, that that is the person you are going to target. Again, the legislation as it's drafted doesn't talk about organized crime or whatever. You're going to get the welfare frauds. You're going to get the vulnerable little person, the person who either cannot or will not or doesn't have the resources to fight, to intimidate the state into withdrawing from their intention. It's not going to untangle these big, organized criminal operations.

Mr Tilson: I have a brief question and then Mr Hastings has a question.

Just to clarify, I can assure you that there is no reverse onus clause in this legislation. Categorically, there is no reverse onus clause. I just wanted to make that clear to you because you seemed to be-

Dr Beare: So if I am not charged and you seize my house based on the balance of probabilities-

Mr Tilson: I'm not going to debate it with you. I'm telling you that we've had the Attorney General and we've had a staff person from the Ministry of the Attorney General come here today and say there is no reverse onus clause. I have one question for you. I don't want to get into an argument with you. I'm just telling you that's what's been said today.

My question is with respect to helping victims, with respect to preventing injury to the public. You are a lawyer, correct?

Dr Beare: No.

Mr Tilson: You're not a lawyer?

Dr Beare: No, I'm not.

Mr Tilson: Good for you. Can you tell us what remedies you believe the province does have with respect to dealing with organized crime?

Dr Beare: I thought your question was going in the opposite direction. In terms of remedies regarding organized crime, again, when we think of organized crime, a lot of organized crime does not in fact have victims. Chief Fantino was talking about drugs. A lot of it is consensual. You can get into a debate that obviously there are some consequences of those activities. But in terms of financial frauds and things like that, is that the kind of restitution areas you're talking about?

Mr Tilson: I'm just asking for your observations.

Dr Beare: Again, in terms of your question regarding remedies for organized crime, I think it's still the criminal court that we should be going to.

Mr Hastings: Ms Beare, do you understand why this legislation is here? I think people from the law community don't meet with the people from the enforcement community. My thesis would be that one of the reasons this legislation is here is because of the extra-high standard of "beyond a reasonable doubt" in the criminal law when you're dealing with the seizure of property, when in point of fact there seems to be little endeavour from the feds, particularly in a number of areas-money laundering, immigration smuggling, telemarketing and commercial-corporate fraud right across the globe.

It seems to me, then, you believe that the criminal approach, with its high standard of "beyond a reasonable doubt," is more than sufficient to deal with the so-called mythical-you haven't ascribed that, but I get an impression that you think Fantino's approach is a little overdone, that it's not as organized and not as comprehensive as it is from what I can see and what I've read and what I've seen with a few people in my office just in the whole area of telemarketing who have been defrauded, and not just seniors. Could you focus on that?


Dr Beare: Those activities that you mentioned are very serious, but our system of justice in Canada has been one where you find people guilty of them. You build a good case, you charge the person, and then again, with proceeds-of-crime legislation in place, you take away their proceeds. If in fact it is a criminal organization, you do it on that rather than a balance of probabilities where you haven't even brought a charge. As Chief Fantino explained, you possibly have very little involvement by the police community. Yes, you do save up resources so that the police can go off and do something else, but that's unlike traditional justice in Canada. It's remarkably different than anything we have had.

Mr Hastings: I just have a different perspective, I guess, than you do on traditional justice in this country.

The Chair: Thank you, Mr Hastings, and thank you very much for coming in, Dr Beare.


The Chair: The next speaker is Anthony Moustacalis, member of the criminal law committee, the Advocates' Society. Good afternoon.

Mr Anthony Moustacalis: Good afternoon.

Just a quick response: there is no reverse onus in the legislation. As a criminal lawyer, reverse onus refers to the onus being on the accused person, the defendant, to establish their innocence, as it were. This legislation makes it clear that the burden of proof is on the applicant, who's the Attorney General, on a balance of probabilities, which is a low standard but is still a recognized legal standard.

But I'm here on behalf of the Advocates' Society essentially to go over some concerns that our committee has with the legislative scheme. I've presented an outline of that submission with particular areas of concern; really, there are five.

I take it from what I've heard from members or other people making submissions that several of these have been covered. I'm not going to touch too much on the constitutional problems. Obviously when there's a scheme put forward that covers potentially criminal activity, then it might be open to scrutiny under both the Charter of Rights as well as plain constitutional rights. My focus is going to be more on the balance of the particular concerns which I've got listed there.

When I say "Overlap with federal scheme," I've filed with my submission copies of the Criminal Code section that at least outlines what crimes are covered by the proceeds-of-crime, enterprise-crime type of legislation that the federal government has in the Criminal Code, as well as under the Controlled Drugs and Substances Act. Essentially, for anything that's significant, murder down to theft, those types of activities are covered. Similarly, although simple possession of drugs is not, anything related to sale, cultivation, and so forth of narcotics is covered and those proceeds can be seized. So there is an overlap with that, and what we mean by an overlap really ties in with my fifth point, which is that there is a potential conflict therefore as to what scheme should be used by the police.

For instance, one of the potential difficulties may be that depending on which police force is looking to solve a problem-let's say there's a drug transaction where the police want to attack the proceeds. Do they go under the Criminal Code? If it's the OPP, are they going to be more inclined to use this legislation to do that? Is the Solicitor General going to direct that this legislation gets priority over the Criminal Code? What if it's the RCMP? And, lastly, what if it's a municipal organization? So there's a potential conflict as to what scheme should be used by the police.

Our other main significant concern is number 3, which is that it's really too broadly defined and there is potential for abuse. As I've outlined in italics, under part II of this legislation, section 2 defines "unlawful activity" to include essentially breach of a provincial offence, any type of provincial offence. Not to appear ridiculous, but being a lawyer I looked at the beekeepers' act. If you sell bees without a licence, that's an offence and potentially could come under scrutiny in this case. We would all hope that a responsible Attorney General, being responsible to the Legislature, would be criticized roundly by the public for something like that. But the question becomes, where do you draw the line as to what type of activity comes under scrutiny, considering it covers any type of provincial offence? For instance, if a restaurateur is charged under the Liquor Licence Act repeatedly, they could lose their restaurant potentially. That would be covered under unlawful activity. In other words, it's very broad, and that in itself means it could be subject to legal scrutiny and challenge.

I should mention that our organization has over 2,000 lawyers, who cover the gamut from representing victims, representing persons who are charged, as well as people in the justice system, such as crown attorneys and so forth.

The next concern and the next section that I have is subsection 6(3). Essentially that says that when the money is taken, the Minister of Finance can provide compensation to victims of crime. Part V of the Family Law Act is referred to. I understand that is, for instance, relatives of people who have been harmed traditionally can sue civilly and obtain damages. But this scheme doesn't provide for any itemization or indication as to how much would be paid, whether it would be equal to what could be recovered from somebody suing civilly. Is it going to be tied in to the criminal injuries compensation type of rate, where the maximum is $25,000?

I'll give an example from a colleague who had a situation where a father was found not criminally responsible for killing his spouse. He then conducted a lawsuit on behalf of the surviving children and recovered over $300,000 on their behalf because he had assets and so forth. Is that person still going to be in a position to sue and recover damages in that amount under this legislation? It's not clear, and that's a potential difficulty for victims.

If I can refer to the last page of my submission, you will note that "Proof of offences," section 17 of the legislation, indicates that "proof that a person was convicted, found guilty or found not criminally responsible on account of mental disorder," is proof that a person committed the offence. Again, in my notes to you I note that this may create unfairness by including mental disorder and may limit the recovery. I have already given an example of how a recovery might be limited by a person seeking damages against someone who is found not criminally responsible.

When we talk about how it may create unfairness by including mental disorder, that's really I guess a legislative judgment call, that persons in that situation should be covered by this scheme. I just point that out as to whether that's something that is fair or not.

Those are essentially the submissions I wanted to make.

Mr Rosen, who is supposed to come after me on behalf of the Canadian Bar Association, wanted me to extend his apologies and regrets. Their organization wasn't able to develop a submission that they wanted to put forward at this time, so he won't be coming. I guess that's the good news, that you've got a break after me.

The Chair: Thank you very much, Mr Moustacalis. Questions, Mr Kormos?

Mr Kormos: No, thanks.

The Chair: The government?

Mr Tilson: I'll ask you the question I asked the last witness, who I thought was a lawyer, and she wasn't.

Mr Kormos: And you never apologized.

Mr Tilson: You are critical of the legislation. My question is, what remedies does the province have in dealing with organized crime, specifically when we're concerned with assisting victims and assisting members of the public? I understand that there are charter issues and constitutional issues. Those have been referred to by lawyers, and I'm sure before these hearings are out there will be other lawyers who will come and talk about the charter and the Constitution and whatever else they can talk about. But from your perspective, as a representative of the Advocates' Society, can you tell us what remedies the province does have?


Mr Moustacalis: Not directly but indirectly the province has remedies through their own agents-the crowns, the police prosecuting matters and using the Criminal Code provisions for proceeds of crime and enterprise crime. It's not my mandate to indicate what changes could be made, but there are other pieces of legislation, like the Highway Traffic Act, to use a simple example, which provides for seizure of motor vehicles by the police for people who are driving under a suspension for a second or third time, whatever it is. So there could be something structured in such a way that it's not so broad that it covers everything, but it's aimed at more specific groups of organized crime in that context. I don't really want to go beyond that and speak personally as opposed to who I'm here for, but those are the sorts of areas that could be pursued. Our mandate in reviewing this is to point out some of the difficulties that we see as lawyers with experience in litigation in a broad area, including representing victims, prosecutors and defence attorneys.

Mr Tilson: Not getting into a legal debate, but your comments did talk about the overlap between the Criminal Code and this bill. This bill has been addressed by the Attorney General and by a staff person from the Attorney General's office, who have said that this bill deals specifically with property issues whereas the Criminal Code deals specifically with penal provisions on these types of matters. In this bill there are no penal provisions.

Mr Moustacalis: That's correct.

Mr Tilson: Having said that, do you still feel the same way?

Mr Moustacalis: Yes, I do, but because of what I talked about, the overlap. I still don't think that resolves the conflict over what scheme the police should use in a situation where there is a crime and charges are going to be laid. Perhaps if there isn't a crime, then I think the other problem with the legislation is that it is very broadly defined and can cover too much and has the potential for abuse there, as I mentioned.

Mr Hastings: Mr Moustacalis, thank you for coming. How would you strengthen, then, or reinvigorate the unlawful activity section so that it's tightened, creates the objectives in the bill, realizes them, but doesn't produce the unintended consequences the other way, some of those other offences that you can get charged with under the Highway Traffic Act and so on?

Mr Moustacalis: Again, that's kind of outside my mandate here, but to answer your question and not to avoid it, as a lawyer, there are a number of ways of approaching these issues. For instance, certain pieces of legislation that target serious offences like securities legislation for insider trading fraud-that's provincial legislation-or legislation for environmental offences could have these provisions put in them.

Mr Hastings: It should be spelled out specifically?

Mr Moustacalis: Yes, or it could say, "This applies to the following breaches of the following pieces of provincial legislation," for example.

Mr Hastings: Could you briefly elaborate upon what you alluded to earlier about the potential policy conflict among the various police forces in the administration or the implementation of this legislation?

Mr Moustacalis: Let's say you're a police officer and you've come across a crime; let's say a sale of drugs. In the second attachment I've given there's a copy of the Controlled Drugs and Substances Act, which says that if you sell drugs, then any profit or anything related to that can be seized. It's also an unlawful activity under this legislation, which means that you could advise the Attorney General that you've come across an unlawful activity and does the Attorney General want to bring an application to seize that money? What do you do as a police officer when you're faced with that? Presumably if you're with the OPP, maybe the Solicitor General might give you a standing directive that says, "When you come across these situations, let us know so that the Attorney General can bring an application." But if it's a drug matter, then ordinarily that would be something dealt with by the federal Department of Justice prosecutors, who might want to get their hands on that money. That's what I'm talking about when I say there could be a conflict over which scheme a police officer would use. It's not clearly spelled out and you do have a definite overlap between both of those areas, in my submission.

Mr Bryant: If the act works as the ministry wants it to work, there's a flood of litigation using this bill off to the civil courts. Would that not necessarily mean, given the backlog right now, that we're going to need some assistance on the side of providing resources to civil courts?

Mr Moustacalis: I would think so, yes, because as you mention, the civil courts are busy. There's always a concern about access to justice. There's obviously going to have to be some forms developed for the Attorney General to bring these applications. The legislation does provide for notice, obviously, to affected parties. It does say that the Attorney General has a choice as to whether he or she brings the action by way of an action or an application. What that means practically is that an action means you end up having discoveries and it prolongs the procedure. An application is a document that's brought with affidavits so you don't go through as much rigmarole. But still it's going to add, obviously, to the impact; how much, I guess, depends on how aggressive the Attorney General's office is in bringing these applications.

Mr Bryant: Actually, nobody has talked about the division of powers. The Canadian Civil Liberties Union just dealt with the charter. As has been said, there are always going to be challenges with new legislation, but my concern is that all this time and money is going to be spent on legislation that just gets struck down because it intrudes in federal jurisdiction, if in fact it does. Is this a big concern or is this a hypothetical concern with this legislation?

Mr Moustacalis: I think the best I can say on behalf of the Advocates' Society is that we felt it was a concern. Unfortunately, we didn't canvass it in as much detail as we would have liked, but we're aware of the general principles. As we all know, the federal government has jurisdiction over criminal law, the province over property and civil rights, but the federal government has sort of occupied the field here as far as proceeds with respect to criminal law, so they would have priority. Secondly, the Supreme Court of Canada has said that when the Department of Justice wants to prosecute, they can take over any type of prosecution or case over the province. Those are some of the principles that are going to come into conflict that we would identify.

Mr Bryant: Back to conflicts again, you talked about the conflict between the use of the civil remedies, as envisioned in this bill, and the criminal remedies under the Criminal Code. As you know, the Attorney General's ministry has a civil department, if you like, and a criminal side. Can you imagine there actually being a conflict with the Ministry of the Attorney General whereby the civil folks are saying to the criminal folks, "No, don't prosecute because we can do it easier on the civil side"?

Mr Moustacalis: I suppose that's a possibility. They would probably work out their own protocols as to when to do those things or not, but it will require a liaison and that is a good point as well. Much as I pointed out that the police would have some conflict over how to use the scheme, they might have some difficulty. But in fairness to them, they have good lawyers there and they would figure out a protocol.

Mr Bryant: But they're going to need one; they're going to need some kind of protocol. I agree, they have great lawyers there, but they're going to need some kind of protocol.

Mr Moustacalis: That's right.

The Chair: Thank you very much, Mr Moustacalis, for coming in this afternoon.


The Chair: The last speaker for the day is Mr Roddy Allan, principal of Kroll Lindquist Avey. Thank you for coming in a bit earlier to fill in for the next timeslot, Mr Allan.

Mr Roddy Allan: I have a relatively brief submission or presentation to make to you today. That's perhaps appropriate as I'm the last person.

I'm a principal in a firm that's involved with forensic accounting matters. Often we are involved with civil and criminal fraud investigations and consequently we have some insights on very practical issues that might come to the fore on implementation of the proposed act. I'm going to stay well away from legalistic issues, as I'm not qualified to comment upon them.

I'm going to stick to three relatively straightforward and practical issues for your consideration, as follows. I'm going to talk briefly about the linkages I've described between unlawful activity and property, the resources required to establish that link and the related costs, and also some issues related to compensation that might be payable to victims under the act which I think are worthy of consideration.


On my reading of the act, the bill seeks to prevent retention of property acquired as a result of unlawful activity, proceeds being defined as property acquired directly or indirectly as a result of unlawful activity. There are obviously provisions for forfeiture or preservation of that. The drafting of the bill creates a need to establish the linkage or relationship between the unlawful activity that's being investigated and the property that results from it. The question arises, how do you establish that linkage?

Organized crime is a business, and it's run as a business by the people who operate it. That business must be understood fully, firstly to determine that it's unlawful activity or that unlawful activity is taking place, and secondly to determine the cash flows or the benefits that are resulting from that business.

In its simplest form, the direct linkage is quite simple. For example, unlawful activity takes place and funds are deposited into a bank account. It's relatively straightforward to establish that those are the proceeds of that activity. In a simple example, an illegal telemarketing operation solicits cheques from its victims and the funds are deposited into a bank account.

Unfortunately, the reality is that some of the investigations that are going to provide evidence for proceedings under the bill are a little more involved, particularly when we talk about indirect linkages. What I mean by that is situations where unlawful activity takes place and proceeds or some other form of consideration is created. Money may be laundered through a number of bank accounts. It may be used to make related-party transactions. It may be manipulated in any number of ways before it becomes engendered in the types of property that you are seeking to forfeit or preserve under the act.

Advancements in technology and communications have made instantaneous transfers of money and other assets through multiple jurisdictions very easy. Consequently, on a very practical level, there are significant complexities in effectively investigating complex, as opposed to simple, organized crime business.

Notwithstanding the ease with which property or other assets can be moved around, there are other complicating factors. For example, if a business is being conducted which contains a mixture of lawful and unlawful elements, how do you separate the unlawful proceeds from the lawful ones?

Secondly, unusual transactions may take place in the unorganized crime environment which would further obfuscate the trail of where the benefit from that unlawful activity is going; for example, barter transactions, lending transactions and things of that nature.

Finally, poor or incomplete business records would significantly hinder an investigation.

Just to give you an example from our firm's experience and my personal experience, our firm was retained on behalf of a US agency to investigate a very large illegal telemarketing operation in Toronto that was preying on elderly US citizens. Those citizens were solicited by telephone to provide Visa or other credit card numbers, and the resulting slips that were written up by the telemarketer were shipped to Australia for processing through a front company which deducted a 30% commission for processing the money. The money was then redirected through a number of other entities, through Mauritius, and ultimately back to Ontario, where it was used to purchase racehorses, houses, cars, you name it.

In that simple example, you can see that in the more sophisticated organized crime business, creating a direct or an indirect linkage between the actual activity, on the one hand, and the proceeds, on the other, can be quite involved.

The reason I bring this to your attention is that I think that for the police and the lawyers who will be taking this legislation forward and working with it, creating that indirect linkage may be a disincentive to take on some of the more complex cases.

In my attendance at the organized crime summit that Minister Flaherty organized in August last year, one of the overriding themes was that different types of expertise must be brought to bear in order to create those linkages and make the investigations happen. My conclusion on the issue of linking property and proceeds is that, to the extent possible, if there's any facility to allow for additional expertise to be brought to bear in these types of investigations, I think that would actually assist in expediting certain provisions of the act.

The police, in our firm's experience, are not provided the necessary training to deal with the most complex cases. Unfortunately, neither are they provided the budgets required to retain that outside expertise. As the proposed act does not have what I would describe as a reverse onus provision, the onus is definitely on the investigative agency to establish the connection between property and unlawful activity. What I mean by "reverse onus" is the proposition that was discussed at the summit I mentioned earlier that property be seized and it be incumbent upon the owner of that property to prove that it was obtained by legitimate means. So my suggestion to you is that a proper investigation of the complex, as opposed to straightforward, organized crime may not be accomplished without some additional expert input.

This takes me to my second point, concerning the use of forfeited property. One of the uses of forfeited property envisaged in the act is to make payments to victims, which is clearly a very worthwhile activity. There are other provisions as well, including one to make payments to compensate the crown for pecuniary losses suffered either as a result of the unlawful activity itself or in commencing the actual proceeding. These expenses are not defined. My suggestion is that they ought to be defined as reasonable expenses in order to provide the greatest possible scope for repayment to victims.

However, it's also likely that in some cases, for example in drug cases, no victims will come forward, for obvious reasons. By broadening the definition of "reasonable expenses," it may be possible to remove some of the disincentive I mentioned earlier in taking on the more complex cases. For example, if reasonable expenses were to include reasonable investigative expenses with the approval of the Minister of Finance, then that might provide some additional resources to police in the more complex cases. I should add that this is not self-serving. Our firm has plenty of work and we're not looking for it through this mechanism.

Finally, I'd like to talk briefly about compensation that may be paid to victims. There are some housekeeping points that I think are worthy of consideration, either as part of the act or as part of any accompanying regulations.

The proposed bill provides for compensation to be paid to victims who suffer pecuniary or non-pecuniary losses. Those losses may be straightforward. For example, if there has been adequate investigation of the unlawful organized crime business, there may be financial information from that business that would identify victims and establish what they may have taken from them. Getting back to my telemarketing example, telemarketers keep lists of the people who provide them the greatest money, so those records may be readily available. However, the act doesn't provide for situations where the property forfeited is not sufficient to pay all victims. So my suggestion would be that it provide, or any accompanying regulation provide, for a pro rata distribution in that circumstance.


Secondly, there does not appear to be a limiting clause in terms of the amount of compensation that might be paid. For example, in the event that consequential losses were suffered, as opposed to an immediate and direct loss, there's no provision stating whether that would be included within the compensation scheme or not.

Thirdly, I'd also suggest that any accompanying regulations, or the act itself, should provide for proper and thorough authentication procedures to validate any claims that may be made. I'm sure that when the first successful case is made under this act there will be many people who will come forward seeking compensation, and it would be worthwhile to have an appropriate process in place to validate those claims.

To recap, I think the drafting of the bill as it's currently presented does create potentially some disincentive to take on the more complex cases where proceeds may be quite far removed from the original unlawful activity. Secondly, subject to reasonability and approval from the minister, it might be worthwhile to consider if investigative costs could be funded from the returns from seizure of property, as long as that doesn't impair significantly the repayment of funds to victims. Thirdly, some further clarity or supplementary regulation is required in connection with the definition and terms governing payment or compensation to victims. That's essentially my submission to you today.

The Chair: Thank you very much, Mr Allan. Mr Hastings.

Mr Hastings: Sir, thank you for coming in. You made a pretty interesting point about reasonable expenses to cover investigative costs. We had a couple of earlier people submit that there would probably be very few people come forward under the victim category, in especially the drug situation.

I'd like to ask you if you think the term "victim" should be assigned to more than just an individual or a family or a group of people; that it could be widened to include a neighbourhood, especially when you take into consideration Chief Fantino's contention that, in the case of drugs at least, the poorest neighbourhoods are usually the biggest victims of this kind of activity in terms of the distribution networks. I'm wondering what your thoughts would be as to whether a definition of "neighbourhood" could be put into the regs or a policy if they were ever to have distribution of the funds coming from this bill.

Mr Allan: I think there are two parts to my answer on that question. You mentioned that your expectation might be that in many cases victims would not come forward-

Mr Hastings: This was a contention from a previous presenter.

Mr Allan: Right. I think that depends very much on the type of unlawful activity. My own experience is related very much to illegal telemarketing. Information relating to victims was readily available and making repayment to those victims was not problematic, which in fact happened in two cases that we had in British Columbia, which was very satisfying.

As to the definition of a neighbourhood as a victim, I think the more you broaden the definition of "victim," the more problematic it becomes to determine the amount that ought to be paid. Maybe it's just my training as an accountant, but I'm not sure how I would quantify the amount that ought properly to be paid to a neighbourhood because there has been an ongoing level of drug activity there. I think there is a clause within the act, and I'm sorry I don't remember it exactly, that speaks to victims of a specific activity who suffer pecuniary or non-pecuniary losses. Then there's a further clause which talks about other victims in a broader sense. That may be the clause that can be explored in the situation you're describing.

Mr Bryant: Thank you for coming. How does it work right now in Ontario for these investigations under the Criminal Code? Are forensic accountants, say from your firm or other firms, retained, or is it all done internally, or is it a bit of both?

Mr Allan: It depends what you're talking about. We do a lot of just regular corporate fraud stuff. That's how I make my living.

Mr Bryant: Yes.

Mr Allan: The police forces have people in-house. Typically, these are people who are on secondment from firms similar to mine. Based on my understanding of it, which is second-hand information from the police, people I know, these in-house people are swamped with work. For example, if I were to go to them with a client who had a very large, complex fraud and say, "Are you able to investigate that?" usually the response is, "No, we can't because it's too complex" or, secondly, "Yes, we can, but it's going to be a year, 18 months, before we get to it," which is not much use to the victim.

In the organized crime element, as opposed to the regular corporate fraud element, there may be fewer resources, but there is that hurdle. I think it's an impediment to getting to the bottom of what has happened and clearing up the situation. We see it all the time. If those impediments weren't there, then I'd be doing something else for a living. I'm very busy, so that tells me there's something that's not right.

One point I should clarify is that when I talk about reasonable expenses of investigation, that could be police expenses as opposed to retaining an outside firm, such as ours or one of our competitors, for example, if they had to draw somebody else into their group, maybe it's overtime or maybe it's just something else, to get over that hump and get away from this issue of exceeding tight budgets, which are in operation today for police forces. It's too bad something like that would get in the way of making this work.

Mr Bryant: My question is, if on the law enforcement side we need, but we don't have, an army of forensic accountants and they're overworked and overburdened right now, on the flip side to it, I take it organized crime does have an army of forensic accountants arranging their affairs, which makes it complicated for police?

Mr Allan: They have a lot of people who are making sophisticated arrangements to manage the funds that are obtained as a result of their activity, absolutely. In the summit that occurred last August, I believe I was the only forensic accountant who attended. I just sat at the back and listened very carefully. Almost without exception, the speakers got up one after the other-Commissioner Zaccardelli, who's now head of the RCMP and at that time was assistant commissioner, was very strong on this point, that he needs resources and budgets and the capability in order to deal with that problem. Really to reinforce that point was why I came along today.

Mr Bryant: On that front, thank you very much for coming.

Mr Kormos: I seem to recall now the trial of last year, the major fraud, where the Toronto police wouldn't even investigate it, where the victims had to hire their own forensic accountant, Brian Patterson. You remember that? What was that case?

Mr Allan: I don't recall that.

Mr Kormos: The Toronto accountant who scammed a bunch of people, including a couple of high-profile ones, where the judge chastised the police for not undertaking the investigation. That's consistent with what you're saying. My problem is that the police don't even have the resources or the means to investigate the crime. Good grief.

Chief Fantino was here earlier, and he didn't show a whole lot of confidence in the Criminal Code provisions. I wish we had had more time, because, heck, if they can't investigate the crime itself, it would be even more difficult with a sophisticated operation to get down behind it and track down the money.

Mr Allan: I'm sorry, I don't recall that particular case, but there are so many of them out there.

Mr Kormos: That the police aren't investigating?

Mr Allan: I don't know what they're investigating and what they're not. I'm not going to answer that one.

There is a distinction between crime and unlawful activity in the corporate environment versus what we're looking at under this bill and the organized crime environment. In the corporate environment, you may have a wealthy corporation that has the financial capability to retain people from outside even after it has been defrauded. You'll do some investigation and take it up to the police with a nice report with a ribbon on it. But in the organized crime environment, where you're dealing with crime which, not exclusively but in large part, is perpetrated against individuals-and certainly I've seen this again in telemarketing, where they've been completely cleaned out by these people-they don't have a capability or a willingness to pony up additional funds to finance any kind of investigation. The difficulty is greater on this side than perhaps it is on the corporate site.

The Chair: Thank you very much for coming here this afternoon, Mr Allan.

That concludes today's proceedings. We will reconvene tomorrow morning at 10 am in committee room 1, which for the purpose of anyone-

Mr Kormos: No television coverage?

Mr Tilson: On a point of order, Madam Chair: My understanding is that that has been changed and we will be meeting in this room, but I trust you'll be talking to the Chair, Mr Beaubien, and that-


Mr Tilson: Mr Kormos agrees with me.

The Chair: OK.

Mr Tilson: Madam Chair, we will find it, but my understanding is that this committee will be in this room.

The Chair: OK. What I will do, members of committee, is, I will check with the other Chair and I will let each office know.

Mr Kormos: It's in one or the other.

The Chair: It's in one or the other.

Mr Tilson: I agree with Mr Kormos.

The Chair: Unless you hear from me otherwise, it will be in this room tomorrow morning. Thank you. Meeting adjourned.

The committee adjourned at 1623.