Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 7 - Evidence - May 27, 2010
OTTAWA, Thursday May 27, 2010
The Standing Senate Committee on Legal and Constitutional Affairs met this day at 10:32 a.m. to consider Bill S-9, an Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime).
Senator Joan Fraser (Chair) in the chair.
[Translation]
The Chair: Honorable Senators, welcome to this meeting of the Standing Senate Committee on Legal and Constitutional Affairs.
We are continuing our consideration of Bill S-9, an Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime). Our first witnesses this morning are, from the Canada Border Services Agency, Ms. Caroline Xavier, Director General, Corporate Secretariat Directorate; from the Canada Revenue Agency, Mr. Terrance McAuley, Assistant Commissioner, and Ms. Johanne Charbonneau, Director, Criminal Investigations Division.
[English]
Ms. Xavier, please provide your statement, and then we will go to questions.
Caroline Xavier, Director General, Corporate Secretariat Directorate, Canada Border Services Agency: I would like to thank you for the opportunity to participate in today's hearing.
I am here in my former capacity as the Director General of the Policy and Program Development Directorate at the Canada Border Services Agency, CBSA.
[Translation]
The Canada Border Services Agency is mandated to provide integrated border services that support national security and public safety priorities and facilitate the free flow of legitimate persons and goods, while meeting all requirements under program legislation. The word ``integrated'' reflects the fact that, upon our creation in 2003, we assumed responsibility for enforcing immigration and refugee policy, and for border inspection of food, plants and animals, as well as the traditional customs mandate. This amalgamated structure is unique in the world.
[English]
Last summer, amendments to the Customs Act were made to strengthen the CBSA's ability to interdict contraband and other illegal items in customs controlled areas, such as airport tarmacs and seaport docks. These amendments also allowed the agency to bring greater security within the trade supply chain through the receipt of advance commercial information vis-à-vis the agency's eManifest initiative.
To control the movement of goods, the CBSA enforces the Customs Act and other federal statutes and regulations. However, none of these acts or regulations includes a provision to specifically address the export of stolen vehicles and, in particular, suspected stolen vehicles.
The Criminal Code amendments being considered by this committee would further enhance the CBSA's ability to manage the border by triggering existing authorities in the Customs Act, which allows the agency to undertake examinations in order to verify compliance with the Customs Act and the Reporting of Exported Goods Regulations.
Currently, while the CBSA may receive and act upon intelligence information, the information must relate to the administration and/or enforcement of the Customs Act. The CBSA may only conduct an administrative check of outbound cargo to ensure compliance with the Customs Act, the Reporting of Exported Goods Regulations or any other act of Parliament the agency administers or enforces.
[Translation]
Currently, if a CBSA officer happens to discover what they suspect to be a stolen vehicle during the course of an export examination, the officer must inform the local police jurisdiction of their suspicion. The police then run checks on the vehicle through various databases to determine whether it is stolen.
[English]
Bill S-9 creates specific offences: the offence of auto theft; the offence of tampering with a vehicle identification number, a VIN; and the offences of trafficking in property obtained by crime and possession of property obtained by crime for the purpose of trafficking. This bill will have a direct and positive impact on the CBSA in that it expressly prohibits the importation and exportation of property obtained by crime.
This prohibition in the Criminal Code will in turn trigger the Customs Act powers that provide CBSA officers the lawful authority to assist police by targeting, examining and using various law enforcement databases for the purpose of detaining stolen vehicles and other property obtained by crime. Such detained property will then be turned over to police for further investigation.
Bill S-9 will also provide the authority for the CBSA to assist police by actively targeting shipments reported for export even before they reach the ports for the purpose of detecting stolen goods and, in particular, vehicles.
Within its current legislative framework, the CBSA diligently works with law enforcement partners on its own enforcement priorities that support police efforts to identify and investigate suspected stolen vehicles destined for export.
In 2008, the CBSA participated in a six-month exported vehicles verification probe led by the RCMP. During the probe, the CBSA used established export verification techniques, tools and resources to look for indications of suspected contraventions to the Customs Act, the Reporting of Exported Goods Regulations or any other act administered or enforced by the CBSA.
During this probe, CBSA officers assisted the RCMP and examined 281 containers at the ports of Montreal and Halifax, intercepting 258 stolen vehicles. The results of the probe provided law enforcement agencies with a glimpse of the current situation regarding stolen vehicles.
[Translation]
With the passage of Bill S-9, the CBSA will have the legislative authority to take a more active and focused role assisting law enforcement efforts to intercept stolen vehicles before they are exported from Canada.
[English]
Bill S-9 will empower the CBSA to actively target and examine vehicles, determine theft through database checks and detain stolen vehicles until the police can investigate the offence and take possession of them as part of its ongoing enforcement activities and within the parameters of its available resources.
[Translation]
Thank you for inviting me to contribute our perspective for your consideration of this proposed legislation. I would now be happy to respond to your questions.
[English]
The Chair: I believe, Mr. McAuley and Ms. Charbonneau, that you do not have prepared statements.
Terrance I. McAuley, Assistant Commissioner, Canada Revenue Agency: No. We are here to provide any information we can.
Senator Wallace: Thank you for your presentation, Ms. Xavier. You referred to the involvement of your department in the export of goods from Canada. Are you also involved in importation from the United States and other countries?
Ms. Xavier: The CBSA manages both the importation and the exportation of goods, with the focus on importation.
Senator Wallace: We heard from Minister Nicholson yesterday that the importation and exportation of stolen vehicles and stolen vehicle parts is a serious and significant issue. Do you have any idea of the dollar amount of this illegal trade in automobiles and parts across the border?
Ms. Xavier: No fulsome study has been undertaken to understand the magnitude of stolen vehicles leaving the country. However, our participation in the probe by the RCMP gave us a good initial glimpse, within our existing authorities, of what the magnitude of the problem can be.
Senator Wallace: It obviously is a serious issue. Considerable money is at stake with this illegal transfer of cars and car parts.
Ms. Xavier: Yes. As a result of the probe, the RCMP was able to seize 258 vehicles with a value of a little over $8 million.
Senator Wallace: You touched on this in your presentation, but could you again highlight the differences, from your agency's perspective, between what the law permits you to do today to deal with this serious issue and what you could do under Bill S-9 if it is enacted?
Ms. Xavier: The Customs Act currently permits us to act purely from an administrative perspective. When we receive a container at the port that is to be exported, we look at the manifest and determine whether the contents listed are exactly those contained therein. We are only able to enforce from a reporting perspective. If we find anything suspicious, we report that to our local police authority, which proceeds to act.
Under this bill, in addition to doing what I just outlined, we will be able to do more in terms of targeting. We will be able to do intelligence gathering and examinations. In advance of a container coming to the port, we will already have a pretty good idea of whether the container contains something suspicious. We will be able to examine it and, if a stolen vehicle is found in the container, we will be able to detain it and then call the local police authority to deal with the situation.
In addition, the bill will give us the ability to check against certain databases, something that we cannot currently do under the Customs Act. This Criminal Code amendment will allow us to check VIN numbers on police databases to determine whether a vehicle has been stolen, which we cannot currently do.
Senator Wallace: These sound like significant changes which, with your agency working in conjunction with other law enforcement, will be a major improvement.
Ms. Xavier: That is correct. It will allow us to be a much more effective partner with other law enforcement agencies. Currently we are very limited in how we can assist, as was demonstrated in the probe. Although we have been successful in our limited capacity, there is more we could do on deterrence
The Chair: When you were describing how this bill would make things better for you, I think you said that you would have an indication in advance if a stolen car is in a container. Is that in the bill, or is that just a function of being able to work more closely with the police and having better access to their records, suspicions and databases?
Ms. Xavier: We would be in a better position to work with the police. As part of our current authorities under the Customs Act, for other prohibited goods we are able to do advance targeting. We have tools at our disposal, such as intelligence, to do our job effectively.
Without this amendment, stolen vehicles are not prohibited from being exported, so we are not able to do any advance analysis or investigative activities, because that would be against the law.
[Translation]
Senator Boisvenu: Thank you very much for being here today to enlighten us on this bill. I have some fairly technical questions for you this morning.
Firstly, I would expect that more stolen cars leave Canada than come into it?
Ms. Xavier: Unfortunately, I cannot answer that question. At this time, we have no statistics in this regard. I do not have this information.
Senator Boisvenu: I see. I imagine that the stolen cars are exported out of Canada by sea rather than overland?
Ms. Xavier: Exactly.
Senator Boisvenu: As to stolen vehicles transiting overland, what can customs officers do if the vehicle goes through American customs before going through Canadian customs?
Ms. Xavier: At this time, we are working in partnership with our American colleagues. If we are advised that a stolen vehicle is headed for the United States, we alert our American counterparts. We work in partnership. But with the new law, we would be able to do something.
Senator Boisvenu: Could you block the road?
Ms. Xavier: Yes. We could detain the vehicle and alert local authorities.
Senator Boisvenu: In Quebec, for about 10 years now, the Sûreté du Québec, the provincial police force, has increasingly been taking over the role of municipal police. The mayors of municipalities complain about the quality of their services, I would even say that they complain about the absence of police or the slow response time of the Sûreté du Québec police officers in their municipality. Are you aware of any situations where the slow response time or the total lack of intervention on the part of police would explain the failure to arrest fraudsters?
Ms. Xavier: I do not have that information with me this morning. I would have to check. I do not even know if that has occurred, because we do not have the capacity to investigate.
Senator Boisvenu: Are you aware of cases where the response of the Sûreté du Québec was too slow when it acted as municipal police?
Ms. Xavier: I am not comfortable answering that question. I would not like to say inaccurate things. I would have to do some checking. However, with this law we would certainly be able to work in partnership with other communities to determine priorities.
The fact of having more authority would motivate them a bit more since they would know they have a good reason to respond, but it is too much of a leap to say that they did not do so before; I cannot answer that question.
[English]
Senator Runciman: Ms. Xavier, in your presentation you used some words that I am curious about. You said the agency would be able to do more and would be more effective. One of the purposes of Bill S-9 is to give your agency full authority to identify stolen vehicles and prevent them from leaving the country. Are you satisfied that the provisions of the bill will allow you to fully — I emphasize fully — participate in the effort to stop stolen vehicles from leaving the country?
Ms. Xavier: Yes, we believe the bill is able to satisfy that authority for the Customs Act triggers.
Senator Runciman: Yesterday I raised with the official from the ministry an issue that would be more appropriately directed, and that is the question of inter-agency information sharing. There have been some concerns with respect to police agencies and the Insurance Bureau of Canada. Your agency has expressed reservations in the past about information sharing.
Ms. Xavier: Yes.
Senator Runciman: How will this legislation impact that position of the CBSA?
Ms. Xavier: This bill does not impact our information-sharing abilities. We are governed by our Customs Act with certain restrictions on information sharing. We will continue to respect our Customs Act sections linked to information sharing, which, for example, allow us to do information sharing with our law enforcement partners. We would not be able to do information sharing of customs information with non-peace-officer organizations. That is consistent with current authorities and would be no different beyond this bill.
Senator Runciman: Would the Customs Act allow ministerial authority to do that? Is there such flexibility within the Customs Act?
Ms. Xavier: I will have to defer that question to counsel.
Senator Runciman: I thought there was some reference to ministerial authority.
Ms. Xavier: I will have to get back to you on the confirmation of ministerial authority. At this point, section 107 of the Customs Act does not permit us to do that. I suspect that would also go to the ministerial authorities, but I will have to confirm that.
The Chair: When you find out the answer to that question, convey it to the clerk of the committee as quickly as possible.
Ms. Xavier: Absolutely.
The Chair: Thank you.
Senator Runciman: This is somewhat related in terms of not sharing third-party information. There was a Canadian Press story a couple of months ago about the CBSA ignoring information from the Canadian Security Intelligence Service, CSIS, on people who should not be enrolled in the NEXUS program. I see a relationship between the CBSA getting information from police on stolen vehicles and this situation of the CBSA receiving information from a third party. My information might not be complete, but it sends out a bad signal regarding the CBSA's willingness to respond to concerns expressed by a third party.
Ms. Xavier: I cannot speak to that particular example. I can tell you that our goal, which was definitely representative as part of the probe, in working with our law enforcement partners will be to do the information sharing amongst ourselves as enforcement community partners to work toward addressing the export of stolen vehicles.
For example, in the probe, we worked closely with the RCMP who, in their capacity, worked with other private entities, such as the Insurance Bureau of Canada, IBC. If we had information, we would share it with regard to something specific like a stolen vehicle found in an export container leaving the country. Our goal with this bill is to be able to work with our law enforcement partners in the best capacity possible, which includes information sharing and intelligence sharing. We do that now, where possible, on certain cases.
Senator Runciman: Mr. McAuley, can you give us an indication of how the Canada Revenue Agency, CRA, is impacted by the auto theft issue and what role you have to play?
Mr. McAuley: In preparation for this hearing, we had a discussion within our office. We find that the impact of this bill will be minor on the Canada Revenue Agency. Our participation is related to the release of taxpayer information that comes through a request of a court order asking for specific details. For example, there might be a request for information on a tax return of one of these alleged importers. We have a very small volume of such work. We do not anticipate a major increase in such court orders coming to our office.
Senator Runciman: Ms. Charbonneau?
Johanne Charbonneau, Director, Criminal Investigations Division, Canada Revenue Agency: The same thing.
Senator Housakos: I have a couple of questions. The first is not related directly to the bill but more to the logistics of how the Canada Border Services Agency operates. I am from Montreal. It is no surprise that Montreal is a hub for the illegal activity of exporting stolen cars and stolen car parts.
There are three ways to transport things out of Montreal: by ground, by air or by water. I understand from discussions that I have had with police authorities in Montreal that 85 per cent to 90 per cent of such activity happens through the Port of Montreal.
Is Canada, through the CBSA, sufficiently policing the port? Why have we not been able to shut down this kind of activity? Is it a lack of legislation, resources or strategy? What is the reason, in your opinion?
Ms. Xavier: In my opinion, definitely the legislation element will provide a prohibition that did not exist before. Even if we had wanted to put more resources to this from the CBSA perspective, we could not have done more under the legislation. The Customs Act does not have provisions for advance targeting or detention. As I explained earlier, if find some sort of anomaly in the examination of a container, we contact the local police authority to act on it. Whether the local authorities can do more should be asked of them.
This bill will allow us to do more. We will be able to do advance targeting and analysis using intelligence information and working with our partners. We will discuss the priorities with our local partners. We work with our partners effectively and we will continue to work in that manner after the implementation of this bill, should it go forward, in order to determine where the threat is high for a potential focus. This dialogue would include our local port authority partners and RCMP partners to determine the overall strategy.
Senator Housakos: How are the communication links between the various police authorities in Canada? Montreal has the RCMP, the Sûreté du Québec, SQ, and the Montreal police. From speaking to my friends in the RCMP and the SQ over the years, I understand there seems to be a line in the sand and a lack of communication. There have been complaints back and forth that they do not have a common database or communication links. That is well known. God knows if we can overcome the political challenges in order to rectify that problem.
How can you do your screening job effectively when there is such a lack of communication links? I suspect that if this is the case between the RCMP and the SQ, there must also be such a problem between the CBSA and the SQ and the CBSA and the Montreal police.
I understand the strengthening of this bill, which is important, but how will we overcome the challenge of basic lack of political will to do what is right and allow common sense to prevail? As a result of all those difficulties, historically we have seen drugs, stolen cars and car parts go through the Port of Montreal at a rampant pace. The problem continues to fester through the years. I know this is not a problem we will solve here at one Senate hearing. However, it seems to be at the core of the difficulty you have.
Also, I see your organization as a screening force, not as a police force; you are not there to investigate. You are there to screen to ensure that the things that come and go at the borders of this country are within their legal right to enter or leave.
Are the people who do the policing in this country well equipped to get information? Are you well equipped to get information from there? I know I have put a big issue on the table, but I would like to have your thoughts on it.
Ms. Xavier: I will go back to the probe because it demonstrates a good example. If we are able to come to consensus as groupings of the law enforcement community, we are able to do good work. We do have frequent bilateral discussions with our law enforcement partners in all the various regions. We have regional intelligence officers who work in our various regions and who actually have very good relationships with both the local police authorities and their RCMP counterparts. Continuing to establish those good linkages would allow us to do our job more effectively. We have some specific investigative teams that could be put in place at some point if a situation warranted it.
We feel there is work to be done. I will not deny that. We will always strive to improve communication and our partnerships with various law enforcement partners, but I feel confident that the probe, for example, demonstrates a good foundation. Regardless, it will be something we continue to work at.
If those partnerships are there, we feel an information flow is possible and is able to happen.
[Translation]
Senator Joyal: Ms. Xavier, if I understand correctly, in the bill as currently tabled, clause 6 amends section 355.2 of the Criminal Code. Do you have a copy of the bill with you?
Ms. Xavier: You are at clause 6?
Senator Joyal: Yes, it is on page 3. Clause 6 amends section 355 of the Criminal Code. Section 355.2 refers directly to the import of proceeds that were obtained directly or indirectly by the commission of a criminal offence.
If I understand correctly, the authority you are granted through the inclusion of that provision in the Criminal Code is much broader in that it applies to much more than only stolen vehicles. You concentrate on stolen vehicles, but in fact, does the authority you are granted by this bill cover any property or thing which could have been obtained by crime?
Ms. Xavier: That is correct.
Senator Joyal: If we assess the authority that is being granted to you, we understand that the other provisions of the bill apply to stolen vehicles, and that an offence has been specifically created. However, the authority you are being granted is general?
Ms. Xavier: That is correct.
Senator Joyal: If you have to put in place a new verification system following the passage of this bill, it will not concern strictly stolen vehicles, but any goods which might transit through your services?
Ms. Xavier: That is correct.
Senator Joyal: What authority do you have when you suspect that goods going through the border are the proceeds of some criminal activity?
As Senator Boisvenu indicated, when we leave Canada as individuals, there are no declarations to be made at customs or the Canadian border unless we want to export some goods we wish to re-import, in which case, of course, we have to obtain certain authorizations, among other things. Generally speaking if I leave Canada with goods, I do not stop at the border to declare them to the Canada Border Services Agency. I would have to declare them to American customs if I cross the American border, or to the authorities of the country to which the goods are being sent.
On what basis can you intercept goods you suspect are the proceeds of criminal activity?
Ms. Xavier: I do apologize, but it will be easier for me to answer you in English.
[English]
We have a strategic export control program.
[Translation]
There is an export program that exists and it is a part of the agency's mandate. Under the current program, the person must go to the agency or the exit point before going, for instance, to the United States or to the maritime port in order to declare the goods to be exported and the specific information concerning those goods. That will not change.
[English]
In the Customs Act now, we have those authorities for our strategic export control. We have a strategic export control program as part of our current Customs Act authorities.
The reporting element required for a consumer or traveller right now will still continue to exist. These authorities will allow us to be able to look at the documentation we are receiving in advance, perhaps, and take more of an investigative lens or an intelligence-type lens to them. We will look at where these goods are destined and be able to work with our police authorities and RCMP partners to determine whether there could be an infraction or a prohibited good.
Right now, if a good is prohibited, such as a stolen vehicle, for example, we cannot detain it. We can only call the local police authority.
Senator Joyal: Yes, that is another answer you gave that I feel needs some additional explanation. I am not on expert on it. When you answered, you said that in your current authority, auto theft is not a prohibited good.
Ms. Xavier: That is correct.
Senator Joyal: What is a prohibited good if it is the product of a theft, or if it is the product of a crime, in your current authority? I do not understand the difference between your current authority and this one. You mentioned a specific good in relation to a product that has been obtained through the proceeds of crime.
I am trying to understand the legal differences that you make in here, so that we understand very well the implications of this bill.
Ms. Xavier: Currently, there is no legislation in the Criminal Code that has a prohibition with regard to goods obtained from crime. That legislation does not exist.
As the Customs Act is written right now, we only have the authority to enforce the Criminal Code when it comes to things that we discover through a routine administrative activity. We use the Customs Act to enforce the Customs Act activities to do customs and immigration business.
If during an investigation we come across what could potentially be a stolen vehicle, we cannot determine whether it is. If we have a suspicion, we call the local authority. For example, if a container comes to the border and the paperwork tells me it is exporting oranges destined for country X, I might suspect that having oranges destined for country X is unusual. As a result, I might already be suspicious.
At that point, I could proceed to examine the container because that is well within the Customs Act regulations. Then, when I open the container, I find a car. That in itself is finding something. At this point, all I can do is take note of the VIN information. I cannot check it against a Canadian Police Information Centre, CPIC, database to determine whether the vehicle is stolen. I can perhaps give an administrative penalty to the exporter for misreporting what was in the container. At this point, I will call the local authorities and tell them I may have in my possession in this container a stolen vehicle. I do not know whether the vehicle is stolen. I can only tell them, and then they come and deal with the item.
Senator Joyal: Who has the authority to seize that good in that context?
Ms. Xavier: Currently, I do not have the authority to detain that good in this context.
Senator Joyal: If you find a car in a container that is described as containing oranges, you have to call the police because the police have the proper authority to seize that property.
Ms. Xavier: That is correct.
Senator Joyal: The police might not immediately have the information related to that vehicle for x, y or z reasons. That vehicle might have been trafficked and the VIN might have been changed and so forth to blur the origin of the crime.
Ms. Xavier: That is correct.
Senator Joyal: Within this bill will you have the authority to seize?
Ms. Xavier: I will have authority to detain the item and still call the police authority, who will then seize the vehicle and deal with it in whatever manner they need to.
Senator Joyal: I am trying to understand the chain of authority. If you have the proof in your hands that this is stolen property, then you have no more authority than just to pass it on.
Ms. Xavier: In the current legislation, yes. In the new legislation, I will be able to detain that container and prevent it from leaving the country, call my local police authority to come and tell them this is the information I have and work in partnership with them for them to proceed to lay the charges as required.
Under normal circumstances right now, containers that come to the border are not necessarily surrounded by the person or persons, because it is usually done and put in a warehouse and so on.
Senator Joyal: By a carrier.
Ms. Xavier: As a result, there may not be a person there in place for me to potentially arrest. Therefore I will detain the container, prevent it from leaving the country and work with my law enforcement partners so they can do their necessary investigation and lay the charges.
Senator Joyal: I see. I am sorry; I am trying to understand what is going on. You made a good presentation, but the difference between what you have already as an authority under the Customs Act and what this will bring in the Criminal Code and how much more efficient you will be to prevent the export of stolen vehicles — because once they are gone the proof disappears, and it is almost impossible to follow up on the crime — to me is a very important element.
Ms. Xavier: That is why we are so supportive and want to see this prohibition in the Criminal Code.
For example — and maybe this will help — there is currently a prohibition that allows us to detain or seize drugs and firearms if we get them on an export. That is a contraband good. When that happens, we detain those goods, and it is not different. The police will come and proceed to do their investigation. That is not different.
The difference though in the current legislation is that stolen vehicles or properties obtained from crime are not a prohibition.
The Chair: May I ask a supplementary, Senator Joyal?
Senator Joyal: Yes, of course. I am trying to understand all the implications of that, because there are many implications.
The Chair: You got me all puzzled too.
Ms. Xavier: It is difficult.
The Chair: This bill makes it an offence to traffic or export any stolen good, and all those wonderful phrases, and says explicitly that it is an offence to steal a car. Is it because we now list cars? Is it because you have in your existing legislation a general power to detain property that is listed in the Criminal Code?
Senator Joyal has me going here. I do not understand where in this bill you get that authority — and I believe you — that you are saying you will get. I am just trying to figure out how. I am sorry if I am intruding on your ground, Senator Joyal, but you really got me going here.
Ms. Xavier: Subsection 163.5(4) of the Customs Act expressly prohibits the use of the Customs Act enforcement powers solely for the purposes of looking for evidence of suspected criminal offences.
A stolen vehicle, if it appears in our container, is a suspected item. We cannot use our current Customs Act to do investigative work. For example, we cannot do a VIN database check. We do not have the authority to do that. When we come across a vehicle that could potentially be stolen, the only thing we can do currently, because we have suspicion based on our regular administrative activities, our routine administration of the Customs Act, is contact our local authorities and have them come and seize the vehicle and proceed with the investigation.
The problem is that there is no prohibition in existing legislation that prohibits stolen vehicles or other stolen goods obtained from crime; there is nothing to trigger the Customs Act to do that evidentiary look.
Senator Joyal: The bill does not amend per se the Customs Act.
Ms. Xavier: It does not amend the Customs Act at all.
Senator Joyal: Exactly. When I read your brief, I was expecting to find a provision in the bill that would amend the Customs Act, or any other act that you have the responsibility to implement, and I did not find any, unless I misread the bill.
Ms. Xavier: That is why there is an amendment to the Criminal Code. We enforce 90 acts on behalf of other government departments, and we do a whole bunch of other prohibitions, but this particular prohibition of property of goods obtained from crime does not exist in any other legislation.
The Chair: Somewhere in here Senator Housakos wants to put a supplementary. Do you want to finish your line of questioning, Senator Joyal?
Senator Joyal: This is something I am trying to understand here — the operation of this bill — which I think is fair for anyone around this table.
Ms. Xavier: Because I am not a lawyer, and also because the law is led by Department of Justice, may I make a suggestion? It is unfortunate you did not have the opportunity to ask this to the department when they were present yesterday. However, I do have my legal services counsel here with me. Perhaps he can do a better job of explaining the technicalities in legal terms, which might be beneficial. Would that be okay?
The Chair: That might be helpful. I believe that is Mr. Robert Borland.
Senator Baker: Proceeds of crime are forfeited to the Crown always.
Senator Housakos: From what I understand, right now you have the right as border customs officers to identify suspicious items and call the police or hold them. If you come across a container that is supposed to be shipping tomatoes or oranges to wherever and you come across an automobile, part of the problem, if I understand correctly, is that you cannot even identify whether it is stolen because you do not have access to that information.
Ms. Xavier: Correct.
Senator Housakos: All you can do is say you have a suspicious item and you call the police and they do their police work, which goes back to what I said earlier: Our customs officers cannot even identify quickly whether the car in the container is stolen.
Ms. Xavier: In the current legislation, we cannot.
Senator Housakos: It might not be a stolen car, for example. The likelihood that the car is stolen is high, but what I am saying is I do not think they have a legal authority to impound something they have not confirmed is stolen.
Senator Baker: If they have reasonable grounds to suspect it, they have.
The Chair: We still are on Senator Joyal's time here, you know.
Senator Joyal: I will share my time.
Senator Baker: It is in the act.
Senator Joyal: Mr. Borland is here now. I was expecting to find an amendment to the Customs Act in this bill when I saw your name coming this morning. Then I started re-reading the bill to see which clause to address to you, and the only one I found I could address to you was proposed new section 355.2 because it talks about importing, exporting and creating a specific offence with, of course, the proper punishment in proposed new section 355.5.
As my colleague Senator Baker said, the proceeds of crime is a notion in itself legally, criminally, that has many implications with the Crown. That is why I am trying to understand here, when you say that it is not a prohibited good, well, anything that was stolen was not a prohibited good before. I understand here. Therefore when the Customs Act was enacted and when you were created as an agency, how did it happen that any stolen good could leave Canada without the proper legal follow-up that would, of course, put it in the control of the penal system?
Robert Borland, Counsel, Canada Border Services Agency: I will just draw your attention to clause 6, proposed new section 355.3. Before we actually discuss this provision, I will just clarify a couple of things.
The Customs Act is designed to identify goods, to identify what the good are, where they are coming from, their origin, and the value of those goods. That was the general purpose of the Customs Act.
The Customs Act does allow the power to detain and examine goods, also for purposes of other legislation that controls, either prohibits outright or regulates in some manner, other goods under other acts of Parliament.
For example, certain narcotics are regulated and controlled under the Controlled Drugs and Substances Act. If CBSA officers found in a container something that looked like heroin, for example, they could use their powers to identify what that substance is. They can detain it; they can notify someone who has greater expertise, such as the police; they can do testing to determine whether the substance is actually heroin, and if so, the police would seize it. We are looking at doing something quite similar.
Senator Joyal: You cannot detain and you cannot seize. Could you make the distinction legally between the two?
Mr. Borland: From the CBSA's perspective, detention is basically with respect to section 101 of the Customs Act. It is a power to hold something, not let the thing go through, in order to determine what it is and whether it complies with other legislation.
Again, with respect to the drug example, is this substance something that is prohibited under another act of Parliament? If it turns out to be sugar, once the officer has determined same, the substance is allowed in and would then be released for use in Canada.
It may take a day or two to run tests, especially when you look at things like cultural property or a statue that might come from Iran and you have to determine whether it is a certain age and whether it came from a certain era or if it has cultural significance; sometimes it takes a bit of time. That is why there is the detention power.
In an everyday situation, if someone comes across the border with something that looks suspicious, sometimes the officers can make the determination right there on the spot. They will detain the item and give the person a slip or receipt for the property. They officers make a decision, and the person can come back and inquire about it. If it turns out the item is legitimate, they will return it to the individual, who can then take it home.
The concern here is that with things such as stolen vehicles, there is no legislation that actually prohibits the movement of the good itself. Usually when you come across a vehicle, you determine what type of vehicle it is, where it was manufactured and what the value is. That is what the Customs Act and the customs tariff is designed to do, to identify an item.
It is something different to go beyond that and determine whether this particular item is actually stolen. That is not a normal customs type of activity. Other countries, such as New Zealand, have taken steps to actually prohibit the cross-border movement of stolen property. They refer to stolen items and specifically mention that those things are prohibited. That is where we are. That is what we are doing with proposed new section 355.3, which explicitly states that the importation or exportation of the item, property obtained by crime and proceeds, et cetera, is prohibited. We are basically flatly stating that the movement of the actual good itself is a prohibited activity.
If someone, even an innocent third party, crossed the border with a stolen good, the CBSA could identify and suspect that the item might be stolen, especially a vehicle. CBSA officers might be able to run the VIN and identify that it belongs to a vehicle that has been identified by the police as stolen. The CBSA or the police would not necessarily take action necessarily against that person, because the person might not have known the item was stolen.
From an in rem perspective, the CBSA would determine that the movement of the good is the problem. CBSA officers would then detain the good and determine, with the assistance of the police, whether it is actually prohibited, and if so, the police can take action against the good rather than the person.
Of course, there are other provisions, such as proposed new section 355.2, that specifically target the activity of a person. They look at trying to determine the penal liability of the person, whereas proposed section 355.3 does not create a new offence. No one will ever go to jail based on proposed section 355.3, but the good itself may be seized and ultimately used potentially as evidence in a criminal proceeding.
Senator Joyal: Essentially, with respect to the goods, you would pass the information on to local police. What about the person?
Mr. Borland: In the case where, for example, a person was actually importing a stolen vehicle, if they have the requisite understanding that the person driving across the border with the stolen vehicle knew that the vehicle was stolen and was in fact importing a stolen vehicle, CBSA officers do have the power to arrest that person. That being said, it would ultimately be up to the police to determine whether to actually charge that person with an offence.
Senator Joyal: Therefore, you detain the goods and arrest the person?
Mr. Borland: That is right. Detain the good. If you have the appropriate grounds to believe that the good is actually stolen, you could then take action using proposed section 355.3. You could use that as the basis for seizing. The police would use the standard powers, such as section 489 of the Criminal Code, and, at the same time, if there are reasonable grounds to believe that the person had knowledge that he or she was importing a stolen item, then that person could be arrested.
Of course, in most cases, these items will be in containers at marine ports, and anyone present will not have any knowledge as to whether there are stolen vehicles in the container.
Senator Lang: I wanted to follow up on the questions that were asked earlier by Senator Housakos in respect to the working relationship between your organization and the various law enforcement agencies in order that we can be successful in obtaining more of these stolen cars that are obviously being imported through the ports.
I just did a quick calculation here. Even at $6,000 per vehicle, which would be very low, the estimated amount at 20,000 vehicles is $120 million. Probably more like $750 million is being exported out of this country. It is an amazing amount of money for value.
In your report, you talk about an operation that took place in 2008 in Montreal and Halifax where you intercepted 258 vehicles. Have you done a similar operation in Vancouver? If so, what is the magnitude of this type of crime on the West Coast versus the East Coast?
Ms. Xavier: As I mentioned, we have an export program, and we do work on the importation side as well as the exportation side.
There has not been a focused exercise with the Port of Vancouver as was done specifically for that six-month probe in partnership with the RCMP. That was a specific exercise in support of bringing forward this legislation.
It is possible that there are vehicles that the port authority in Vancouver is able to address from a Customs Act perspective because they are misreporting, for example. Using our Customs Act enforcement authorities, we are able to act on those. However, we are not able to do more than that, whether in Vancouver, Montreal or Halifax, without a change in the bill.
Senator Lang: I understand that. I was just wondering to what degree the problem was in the Port of Vancouver versus Montreal and Halifax.
The Chair: What is your best estimate?
Ms. Xavier: I do not have that information to give you. We know that the problem of stolen vehicles is national. We know there are areas where it is a larger problem, such as the Port of Montreal; some areas have greater potential risk of this type of activity.
The problem is that because vehicles are not a prohibited good at this point in time, we do not have the statistics to be able to convey how grave the problem is. When we try to determine how grave the problem is nationally, we can only look at the penalties that have been imposed for misreporting, for example.
Senator Lang: The passage of this bill would give your organization added responsibility and authority. Do you have adequate resources to enforce this law and to follow up in the ports we are talking about?
Ms. Xavier: We feel comfortable that we will be able to use the authorities that would be provided by this bill to do our job more effectively. We will continue to perform our duties from a risk-management perspective. With the ability to do advance analysis using intelligence and targeting tools, we will be able to focus our attention on suspicious containers. It would allow us to work smarter within our existing resource base.
Senator Carstairs: Can you tell us the percentage of containers entering and exiting Canada that are actually checked?
Ms. Xavier: I do not have the answer specifically on containers. I have commercial activities that are performed, which is what containers are usually related to. I do not have with me the number in terms of actual containers.
The Chair: Can you provide the information that you do have, and can you provide the answer to Senator Carstairs' question?
Ms. Xavier: Yes. In 2008-09, we did 246,631 commercial examinations of containers, but a far larger numbers of containers would have crossed the border.
Senator Joyal: Is that 20 per cent?
Ms. Xavier: I do not have that percentage with me.
Senator Carstairs: This is the critical point. I think that 10 per cent is very generous, but I suspect you are examining closer to 5 per cent of all containers that enter and exit this country. If that is the case, realistically what good does this bill do? Are we not just again leading to an expectation that we cannot fulfill? You say you have the resources, but you do not have the resources to examine every container that exits or enters this country.
Ms. Xavier: No, we do not. Given the way we operate, it would not be the best use of our resources to examine every container moving in and out of the country. This goes back to the methodology I was speaking about before. Everything we do is done from a risk-management perspective. We want to be able to examine goods that are deemed to be of the highest risk. We do not want to waste taxpayers' money by examining every container or good entering and exiting the country. That would not be an efficient use of our resources.
Senator Carstairs: It certainly would not be efficient use of limited resources. Should there be greater resources to do this kind of examination? We are in an era of terrorism. Unless you get a tip, a container is not examined. Do we have the security that is required for container goods entering and exiting this country?
Ms. Xavier: We are currently working within our resource base, and we feel comfortable with it to do the job we are being asked to do. If there is a view that additional resources should be provided to the agency, the minister would respond to that.
Senator Angus: With regard to the car stealing business, we are not interested in containers coming in but rather in those going out. With regard to the terrorism situation, this country has invested millions of dollars in sophisticated X- ray equipment. I know that containers that come into this country for transshipment to the U.S. all have to be X- rayed. I do not think I am giving incorrect information. I am not sure about containers that are staying in Canada. I know that containers being transshipped are all X-rayed, so let us not get caught up in the 10 per cent figure.
The Chair: You talked about containers that are being imported. Do we X-ray containers that are being exported?
Ms. Xavier: We do have the tools to examine containers using the VACIS machine, which is like an X-ray machine. Those tools do exist.
Senator Carstairs: The tools exist. I grew up in the Port of Halifax, so I am well aware of container shipments. We have the tools, but how often are those tools used? They are not used for every container. You say there is not, on the balance of probability, good reason to use them. What would be the cost to use them? Every one of us travels every week, and we get examined from stem to stern. Should we not be doing the same for goods?
Ms. Xavier: When you travel, you go through a security protocol that is not part of the CBSA's mandate. When a traveller comes into an airport, there is a primary inspection line. A cursory review of the situation is done, and every passenger is not looked at in the exact same manner. With goods, when we are given advance information, we will target the goods that we believe to be of higher risk. The same will happen in the export world.
Senator Baker: I would like a clarification on Senator Joyal's point. You will receive this new responsibility from a change to the Criminal Code. It would expand the jurisdiction of an unlawful act to things that are being imported and exported. That is the new element.
You have been referring to your present authority, which will not be expanded. It is just that you will have a new job to do under this new legislation.
Mr. Borland, I suppose you have had many conversations with the department about how this will be enforced if and when it is enacted. The in rem application literally means the world. In other words, you are investigating property due to a suspicion that triggers all the powers you presently have for examining something to determine, as you said, whether it is sugar or cocaine.
You have incredible powers under the act to investigate if, on reasonable grounds, you suspect, and the police do not have those powers. You have the power to detain and handcuff someone and to examine property, if a person is not cooperating, strictly on suspicion. Do I understand correctly that those powers would come into effect under a new section of the Criminal Code?
In other words, this new provision to which you made reference is an actual provision that changes the definition of trafficking in an illegal substance, property or thing.
Mr. Borland: Did you ask about a new definition?
Senator Baker: Once the in rem seizure has been made, I presume that a court order would follow, as in the case of the seizure of any proceeds of crime, such that anyone suspected of owning or having an interest in that property would be notified by law.
Mr. Borland: Yes.
Senator Baker: That person then has an opportunity to claim that property, and if the property is illegal and they are stupid enough to claim it, perhaps they will be subjected to a charge. A further court order would be made after three months in detention, I presume as I understand the Criminal Code, to forfeit it to the Crown to be sold or disposed of according to the Criminal Code. It is not a change in your law at all; it is just a change in the Criminal Code, which expands your duties.
Mr. Borland: I agree with that characterization. That is really what is happening. There is no change to the Customs Act or to the CBSA's powers, per se. Simply, the CBSA will have a new area of responsibility. Once the CBSA has identified an item as suspicious and detained it, and the police seize the item because they have reasonable grounds to believe that it was obtained by criminal activity, it will be the responsibility of the police and will follow the common, everyday, tried-and-tested provisions of the Criminal Code.
Senator Baker: Maybe it will get to Canada Revenue Agency taxation. Our two witnesses have gotten off easy, but they are well-known. Both of them are well-known in case law as being before the courts many times. They have done great jobs on behalf of the CRA, I must say.
The Chair: I have a question. Ms. Xavier, you said several times that under the new regime, you would have the ability to access to CPIC.
Ms. Xavier: Yes.
The Chair: How would you do that? This bill does not say that. Would you turn to the police, who could give you information from CPIC?
Ms. Xavier: Currently, we have access to CPIC as part of our customs administration. We are able to use that against other prohibitions. The bill would expand that.
The Chair: It expands it to all stolen property and notably cars.
Ms. Xavier: Yes.
Senator Wallace: I address this comment to our guests who have been able to sit there and learn as much as we have from CBSA.
Mr. McAuley or Ms. Charbonneau, clause 9 of the bill deals with the expanded disclosure of information that affects Canada Revenue Agency. It is my understanding that the existing section related to that clause would expand this disclosure to cover trafficking offences. Information that the CRA would have related to those issues could be disclosed upon proper application for that information. Could you confirm that?
I also understand that it works the other way as well, such that it would allow Canada Revenue Agency to receive information related to the trafficking offences and therefore could have implications for the tax elements that are of importance to the CRA.
Would it be a two-way street? The disclosure could go from your agency to those involved in prosecution, or it could go to you when a determination of tax owing might be involved.
Ms. Charbonneau: I will take that question. The bill only allows us to disclose information. Currently, if at any time in their investigation the police feel there is an element of possible tax evasion, they will disclose it. They are free. They are not bound by legislation not to disclose to us, but we are so bound. If an order is obtained, under this bill we would disclose taxpayer information specifically as allowed by that order.
Senator Wallace: They could be any issues related to income tax lost as a result of auto theft trafficking offences. The bill does not change it. You have the necessary powers to get the information you need that would be relevant to those tax-loss issues.
Ms. Charbonneau: That is correct.
Senator Wallace: Can you give us any idea of the cost to Canadians and the Canada Revenue Agency of auto theft in Canada? I am sure it is a significant amount, but have you ever quantified that amount?
Ms. Charbonneau: Unfortunately, we have not done that. Several years ago, we did many investigations involving tax evasion and the selling of illegal cars or cars that had been given another VIN. There are no real statistics or analyses to determine the amount.
Senator Wallace: Do you have any sense of whether it would be a significant amount?
Ms. Charbonneau: I really cannot answer, no.
Senator Wallace: Obviously, a tax loss would occur as a result of a theft and trafficking in stolen automobiles.
Ms. Charbonneau: Given the information that law enforcement has provided, it is a serious issue. Most often, the organized crime behind some of these issues would not report their income in that respect. Ultimately, there is a definite loss to the CRA and to the federal government.
Senator Wallace: The loss goes ultimately to Canadians who pay taxes.
Ms. Charbonneau: Absolutely.
[Translation]
Senator Joyal: Ms. Xavier, you mentioned in your testimony that the checks you do of containers are done in accordance with the strategic export program.
[English]
What is the strategic export program? Is it the protocol under which you determine for a reason that a container should be checked? Is it an abstract rule stating that one in every thousand containers is to be checked?
Ms. Xavier: As part of our mandate, we are to look at goods that enter and that leave the country. The strategic export program allows us to do the exportation side of our business. Elements of our Customs Act identify in the regulations what reporting should occur for exports. Mr. Borland might have more to say on that.
The strategic exports program gives us the ability to look at the reports provided to us on exports and analyze them to ensure that the reporting is as accurate as it should be and that the reported destination is accurate against the routine administration of the Customs Act.
Mr. Borland: There are other acts of Parliament, such as the Export and Import Permits Act, EIPA, which is the Department of Foreign Affairs and International Trade's legislation dealing with items that are more strategic. For example, dual-use goods that have an everyday normal usage but could also be used in weaponry fall under the EIPA. DFAIT would require permits for these items. If the CBSA believes that someone is trying to export one of these items and does not have the proper documentation, the CBSA would identify the particular item for examination. The CBSA would examine the container to ensure that the items therein have been reported and that any required permits or documentation have been submitted.
Senator Joyal: If I understand the operation of the act, the way it will be done, it will make it easier for you to operate, but in fact it will not change your protocol of working. Am I right?
Ms. Xavier: I do not know whether it would be correct to say it would not change the protocol of working. Can you clarify what you mean by that? It would change the protocol of working in that, for example, if in the process of the routine examination we come across a car, we will now be able to do that check against it, which is something we cannot do now. That is not normal protocol for us now.
We would be able to determine whether that good is stolen. Doing the database check against the CPIC database would help us determine whether that vehicle is indeed stolen, and then we would contact our law enforcement partners. That is not normal protocol for us now. That would be a change.
Senator Joyal: What I mean is that now you have a better legal base, as Mr. Borland has explained to us, to intervene, to detain the goods and eventually to proceed with it the way you normally do. However, it will not cause you to be more vigilant in what you normally do. It will not add to your task the way you perform it today. You will not say, ``Now I have the authority to proceed, which will make my job easier,'' and then go across the container and look after the auto theft we have been talking about, or the drugs or arms, or any other prohibited products that you might want to look after.
Ms. Xavier: It will allow us to do more in the sense of targeting. We cannot do that targeting element right now in an investigative way if we suspect a vehicle to be stolen. We will be able to do advanced analysis, advanced targeting of a potential container. For example, if a container is destined for export and we have received the documentation, we will be able to see whether all the documentation is provided and do more work with our intelligence partners and our law enforcement partners. If the RCMP gives us a tip, we will be able to do further analysis with them and act on that tip. That is not normal protocol for us now. This proposed law will allow us to be able to do more targeting and investigative analysis in order to detain that container and do the effective examination and, if necessary, refer it to local police authorities.
Senator Joyal: I am trying to get an idea of how many more stolen vehicles you will be able to report each year that you have been able to stop at the border, compared to what you do now, if you are not putting in more resources or changing the percentage of spot checks that you do regularly, according to your own way of determining where you have to hit considering certain reasons.
Ms. Xavier: The probe demonstrated that when we focused on a particular area, as a result of working on specific ports, working in partnership with our RCMP colleagues, we were able to demonstrate an increased number of findings of stolen vehicles. If we are able to continue that partnership with our RCMP colleagues and determine the priorities of the threat, then we will continue to be able to demonstrate that we can proceed to find potentially more stolen vehicles. However, it will be a discussion to be had with our partners to determine those priorities and which areas to focus on. These are things we will be able to do better than we are doing now.
Senator Lang: I want to follow up on your description of targeting. We know there are certain countries it is easier to get a stolen car into than others. There are only so many ports that these vehicles will be going to. Therefore, would it not follow that your organization would specifically start to look at containers that are going to this port versus other ports? If you narrow it down would that not allow you maybe to become that much more successful?
Ms. Xavier: Absolutely, yes.
Senator Lang: Do you have a comment on that?
Ms. Xavier: I agree with what you have just highlighted. Because of these authorities, we will be able to collaborate better with our RCMP colleagues and other police authorities to determine whether a container destined for country X would have a high probability of containing stolen goods. We would be able to do more of that advance analysis and targeting that we are not currently able to do with the limited authorities we have.
Senator Joyal: I know that you will have a better legal base to do this, but will you do more? That is essentially what I am trying to get from you. Will you be more proactive? Will you make more spot checks, according to your scale of elements that you want to check to make sure this container is kosher and you want to let it go? That is essentially what I am trying to get at, and I do not seem to get the answer that satisfies that this bill will bring you to a more efficient result at the end of the year to stop the export of stolen property and illegal goods.
Ms. Xavier: As part of our daily business, we review the balance of facilitating trade and ensuring public safety. As part of that ongoing analysis, it is possible that we will continue to do such things as these probes and to focus on certain areas because of intelligence provided to us and because of the work we are doing with our partners, so that perhaps we will do more focused activities at a particular port because we have good reason to do that from a risk- management perspective. The answer is possibly yes, we may do more.
I do not want to give you a blanket statement that we will, because on a day-to-day basis, it is all about risk management and looking at the priorities for that time to determine whether the resources are best used to do that versus all the other elements of the CBSA mandate.
Senator Joyal: There is another element. Maybe Senator Baker will cover it.
Senator Baker: I will use my time to do it. It is an important point. Senator Wallace raised it. You will note, Madam Chair and fellow senators and witnesses, that clause 9 in the English is different from clause 9 in the French. In fact, it is considerably different. The French version is twice as long and encapsulates many things that the English version does not.
Senator Joyal noted and I note it as well, Madam Chair, that we should really bring this to the attention of the department. It continues a process that is not advisable, and that is of treating the sections differently in English from the way they are treated in French. What has happened here is that the English version of that particular paragraph in the Criminal Code contains subparagraphs, whereas in the French version does not; the text is in one paragraph. This leads to confusion, not just in the swearing of informations by the police, but also in keeping track of just what is happening under the Criminal Code.
The Chair: What is actually different is in clause 9 of the English version, the words ``before subparagraph (i)'' exist, and their counterpart does not exist in the French.
Senator Baker: That is right.
Senator Joyal: There is no (a), (b) and (c) in French.
Senator Baker: Turn the page and you will see a big empty spot.
[Translation]
The Chair: Perpetration in Canada. Yes.
[English]
Senator Baker: The French continues, and it leads to confusion. Perhaps the committee might consider suggesting to the department to make a correction in that to relieve that confusion.
The Chair: What we will do is seek a response from the department.
Senator Baker: Not an explanation, though.
The Chair: No, a response.
Senator Baker: To correct.
The Chair: They may have a persuasive response.
Senator Baker: There is no persuasive response to that. One cannot have different versions.
Senator Joyal: They made the mistake when we amended that section.
Senator Baker: That is exactly what we did.
Senator Joyal: We suggest the department use the opportunity of opening the discussion on section 468.48 to correct that.
The Chair: I believe you mean section 462.48.
Senator Joyal: It does not make sense to send Bill S-9 back to the House of Commons, because we are the first house of Parliament to deal with it. Therefore, we could correct it at this opportunity. That is what we suggest.
The Chair: We will seek expert input on this matter. Thank you. Senator Baker, I did not know of your many talents in bilingual drafting of legislation.
Senator Runciman: I am responding to Senator Carstairs' contention. She said this proposed legislation would not actually accomplish anything for 5 per cent of containers being shipped out of the country.
As I understand it, the bill's impact on the Canadian Border Services Agency was really prompted by concerns expressed by police and the Insurance Bureau of Canada, as well as the reservations or the inability of the CBSA to react in a way that others felt could help to alleviate the situation. In my view, Public Safety Canada has addressed this appropriately. They see it as addressing a weakness.
We have heard from Ms. Xavier and counsel that they believe this proposed legislation will be very helpful in assisting in this challenge. As I said earlier, the test will be how they deal with third-party information and whether they react to it in a timely way. That has been the concern. They felt in the past that they did not have the tools to react as well or as effectively as should be the case, from others' points of view.
I just wanted to respond to Senator Carstairs' observation that, from her perspective, this would not accomplish anything. I think time will tell, and this really ties in with what Senator Joyal said about what the results of this will be.
Many eyes will be on CBSA now to see how they do respond to this; we will hear from other witnesses in days ahead of their concerns about their responses up to this point. In part, this bill is to address that.
The Chair: That was not exactly a question, was it?
Senator Runciman: No.
The Chair: It was a concluding comment.
Senator Carstairs: I would like to make a similar concluding comment. Without sufficient resources, the bill might be ineffective. That is the issue here. If you cannot examine sufficient numbers of containers, then how will you find the vehicles?
The argument has been given that CBSA will be able to do more of these probes. The reality is that they did the probes before the legislation.
The Chair: Witnesses, you have given us a most interesting, informative and helpful session this morning. We are very grateful to all of you, those who got a lot of questions and those who got fewer questions. Thank you very much.
Our next witnesses are from the Insurance Bureau of Canada: Mr. Richard Dubin, Vice-President, Investigative Services; and Mr. Dennis Prouse, Director, Government Relations. Thank you both for being with us. Mr. Dubin, please proceed with your statement.
Richard Dubin, Vice-President, Investigative Services, Insurance Bureau of Canada: Thank you for the opportunity to speak today about Bill S-9. The Insurance Bureau of Canada, IBC, is the national trade association representing Canada's home, car and business insurers.
Auto theft is a significant driver of insurance costs and increasingly a threat to the safety and security of Canadians. In recent years, our investigative team has seen a sharp increase in the involvement of organized criminal activity in auto theft. Simply put, the joyriding hooligan is being replaced by sophisticated criminal rings that operate as businesses. Stolen automobiles are their stock-in-trade because penalties associated with this crime are lenient and the profits are so attractive.
We know that the involvement of organized crime in auto theft is on the rise, because recovery rates of stolen vehicles continue to decline. A few short years ago, the national recovery rate was 70 per cent. In 2007, that rate dropped down to 64 per cent. Montreal has the highest volume of stolen vehicles in Canada as well as the lowest recovery rate, only 31 per cent.
Cars stolen by joyriders are abandoned and found. Cars stolen by organized crime rings disappear. They are chopped up and sold for parts, or their vehicle identification numbers are switched to hide their identities and they are sold to unsuspecting consumers. Or they are exported overseas. IBC estimates that 30,000 high-end stolen vehicles leave Canadian ports each year to destinations such as Ghana, Nigeria, Lebanon, Dubai and Eastern Europe, just to name a few. These are a few of the well-known hotspots where organized crime rings can fetch a much higher price than here at home.
In 2008, 125,000 vehicles were stolen in Canada. That cost auto insurance policyholders approximately $465 million. In that year, every policyholder in Canada paid an average of at least $30 of their auto insurance premium to finance costs incurred by the acts of car thieves.
According to a Standard & Poor's study that was done back in 2000, when we include costs incurred by the police, health care and court systems, the cost of auto theft climbs to well over $1 billion each year. Many of these resources are spent on car thieves who repeatedly skate in and out of the justice system with minimal to no punishment. Under the current Criminal Code provisions, jail time is rarely handed out, even for repeat offenders. This is because, unfortunately, auto theft is often and mistakenly viewed as a victimless crime.
Auto theft is far from a victimless crime. In 2007, two innocent teenagers were killed in Toronto when a stolen vehicle smashed into their taxi. That same year, Detective Constable Robert Plunkett, a York Regional Police officer, was killed trying to stop the theft of an air bag. In 2004, in Nova Scotia, it was the death of Theresa McEvoy at the hands of a repeat auto theft offender that prompted citizen outrage and a call for action.
With organized crime so pervasive in the business of auto theft and with the profits so high, it is not surprising that intelligence authorities suspect that terrorist groups may be financing themselves with auto theft. A July 16, 2007, article in The Boston Globe cited the FBI's belief that dozens of vehicles stolen from the United States have been used as car bombs in Iraq. The Insurance Bureau of Canada is aware of approximately 200 stolen vehicles that were shipped to the Middle East as part of Project Globe and another investigation where stolen vehicles were sent to Lebanon.
The sophisticated and targeted nature of auto theft crime rings was seen very recently in a high-profile case in November 2009. Six late-model Toyota Highlanders were stolen from the same area and in the same night. It takes only a few hours to load these high-end vehicles into containers to be sent on their way to the nearest port.
There have been some successes in the battle against these crime rings. In 2009, with the assistance of law enforcement, IBC, working in partnership with Canada Border Services Agency and law enforcement agencies, were able to seize 300 stolen vehicles at the ports of Montreal and Halifax. Also, we repatriated as a result of that pilot an additional 72 high-end vehicles from foreign jurisdictions for a total value of $11 million. Unfortunately, this is just the tip of the iceberg, because this was accomplished with very limited resources.
In May 2009, two men were criminally charged as part of an alleged auto theft ring operating in Norfolk, Haldimand and Brant counties in Ontario. According to the Ontario Provincial Police, the operation involved the altering of vehicle identification numbers and the export of stolen vehicles. In May 2007, charges were laid in what was considered the largest auto theft bust in Canadian history against a salvager in Laval, Quebec, for possession of hundreds of stolen engines and transmissions.
You can understand why more and more citizens and governments in this country are asking for action to deal with auto theft. You can understand more fully why we are here.
Fortunately, Bill S-9 targets the auto theft reoffender involved in organized crime who engages in this dangerous activity purely for profit. It recognizes motor vehicle theft as a distinct and serious offence under the Criminal Code rather than a simple property crime. While it proposes mandatory minimum sentences, it does so only for the third and subsequent offences. This is a very reasonable step to take with the reality of repeat offenders.
The bill is comprehensive in that it addresses all the common activities involved with organized auto theft, including possession of stolen property for the purpose of trafficking, export of stolen vehicles and the tampering with vehicle identification numbers without lawful excuse. Also, Bill S-9 will provide Canada Border Services Agency with the necessary authority to identify and seize stolen vehicles or stolen vehicle parts intended for export.
Canadians have the right to feel safe in their own communities. The growth of auto theft and its increasingly violent nature is compromising their safety. The growing presence of organized crime in auto theft is a very troubling development that further threatens the safety and security of all Canadians.
On behalf of the Insurance Bureau of Canada, our member companies and the policyholders they serve, I urge you to vote in favour of Bill S-9 in its current form.
Canadians count on their parliamentarians to stay on top of changes in our world that have an impact on their lives. When money laundering by organized crime became a problem, Parliament acted. When issues surrounding privacy and identity theft became a concern for Canadians, Parliament acted. Now that the nature of auto theft has changed with the increased involvement of organized crime and now that it is threatening the safety and security of Canadians, parliamentarians are again taking action in the form of Bill S-9. Thank you for your time, and we look forward to answering your questions.
The Chair: Thank you. Mr. Prouse, did you want to add anything?
Dennis Prouse, Director, Government Relations, Insurance Bureau of Canada: No. I will just answer questions with Mr. Dubin, if that is all right.
Senator Wallace: Thank you for that excellent presentation. As you point out, the cost of auto theft impacts greatly throughout society, and you have estimated that that cost, in terms of insurance and otherwise, could be over $1 billion per year, so it is extremely serious.
You have indicated very strong support for this bill. Could you highlight for us how you see this bill particularly impacting the insurance industry? Where do you see the direct benefits for the insurance industry in terms of cost and in any other way that you may recognize?
Mr. Dubin: The first thing is that if these high-end vehicles with high values are seized prior to leaving the country, a few things can happen. If a vehicle is caught early, and some of them are, the claim may not yet have been paid by the insurer, which saves the insurer's bottom line, and that cost is not passed on to the policyholder through increased premiums.
The other thing is that we also repatriate vehicles from foreign jurisdictions. Unfortunately, it is more difficult once they leave, but once again that will at least reduce the cost on that particular claim for that insured, and those savings benefit all of us in terms of premium increases.
Senator Wallace: I would think, in particular with the provisions in the bill that relate to the CBSA's enhanced ability to deal with the exportation and importation of stolen vehicles, that is obviously a very significant issue for the insurance industry.
Mr. Dubin: It is huge. This pilot we have been running since early in 2009 is very significant because CBSA had claimed previously to us that they lack the ability, because of lack of legislation, to be able to target and therefore identify and seize these vehicles. The point that was very well made is that they are not currently using intelligence to identify the proper containers to be pulled, and they cannot pull all of them. However, with CBSA using good intelligence and having individuals on hand to target, you will see a significant volume of containers being pulled and stolen vehicles being removed from them.
Senator Wallace: From an Insurance Bureau of Canada point of view, whether this bill will reduce existing insurance costs I suppose could be debated, but it will certainly reduce what increases could otherwise be to rate payers going down the road.
Mr. Dubin: Absolutely. We will all benefit in terms of policyholders and premiums for whatever we can do to reduce the overall costs and the bottom line for what the losses are to insurers.
Mr. Prouse: I would point out as well that we feel so passionately about this because it is more than just about the money. Whether $30 a policy is a large amount of money to you or not, it is the public safety element of this that continues to fuel us. Every time we see this, it makes us angry, as it makes other Canadians angry. I think Canadians want and expect us to speak out on these kinds of issues because, quite frankly, as we have been going through this process on Parliament Hill over the last few years — this is the third round of trying to get an auto theft bill passed — we have found ourselves leading this battle. We have been the ones out there.
Regardless of the issue, when it impacts our policyholders, we will speak out. We will speak out beyond just the pure bottom-line impact on our industry. We feel like we have to speak out on behalf of the millions of policyholders as well.
Mr. Dubin: Just to add, because it is so important, when we started this process, and it actually went back to meeting with Minister Day quite a ways back, the safety and security of Canadians was at the forefront of why we were pushing this issue.
Senator Wallace: It is very gratifying to hear business people make that type of statement. There is a business case that justifies many things, but there is the human element to it, and that is ultimately what counts, so it is gratifying to hear your comments.
Mr. Prouse: This industry directly employs 110,000 Canadians coast to coast. We are forever pointing out that we live in these communities too and feel that very strongly.
Senator Runciman: What is the relationship between the IBC and the Canadian Border Services Agency? Is there a relationship? If so, how does it work?
Mr. Dubin: I have to say that since the beginning of 2009, when we entered into this continued pilot to try to determine volumes of stolen vehicles, we have developed an absolutely superb working partnership with CBSA. We are at the port. They will pull a container, which is their responsibility. They will have it unstuffed, which means removing. Usually there are tires and everything trying to conceal what is in there, and after they do that we usually get involved, and we do the actual identification of the stolen vehicles.
At the port we see not only stolen vehicles that will show up on CPIC, the Canadian Police Information System, but also financed and leased vehicles that look like they are in legal possession. The police do not see those yet as stolen, but it will be theft by conversion as soon as they are loaded on the ship. We get very much involved in identifying all those vehicles through their vehicle identification numbers. Because we are a designated investigative body, we have access to CPIC and will check the VIN numbers to identify whether those vehicles are stolen.
As experts, we will also look for secondary VIN numbers, which are hidden numbers that only we and the National Insurance Crime Bureau in the United States and local law enforcement know, to identify stolen vehicles.
Senator Runciman: You have direct communication then. I am a little curious. Earlier the representatives from CBSA said regarding information sharing that they felt they had an expanded mandate to share information in the legislation, but they specifically excluded the IBC. That is why I was curious about that.
Mr. Dubin: That is a very good point. I think because of the excellent relationship we have created at the port, for the purposes of keeping Canada safe and hoping that this legislation will pass, I believe there is more sharing, honestly, than maybe what comes to the surface.
However, the minister, with all due respect, has within the Customs Act the ability to designate parties where information should be shared, and I really think it is important that that is exercised so that the information clearly, so there are no arguments later, is shared not only with law enforcement but also with partners who can assist them at the port, such as the Insurance Bureau of Canada, which is a designated investigative body for the purpose of preventing any type of insurance crime.
Senator Runciman: The question that was asked earlier was about ministerial responsibility, and you just confirmed that it is there. Thank you for that.
I asked the witness yesterday about terrorism linkages, and you mentioned that in your comments. I know that North American cars are attractive for using explosives, because they blend in and some of them are very large. You mentioned the U.S. experience. Has there ever been a documented incident where a stolen car from Canada has been utilized for terrorism?
Mr. Dubin: No. Due to our conversations with the National Insurance Crime Bureau and law enforcement in the United States, I can tell you that that is where a lot of our concern comes. A stolen SUV with Texas licence plates was found in a bomb factory in Fallujah. More than a dozen of their stolen vehicles have been used as car bombs in Iraq.
What we are seeing in the United States is no different from what we have been seeing in Canada, but we do not have a specific case to put our finger on. However, the key that is common to both is we are both convinced that these funds are so huge that they are probably funding terrorist operations in different parts of the world.
Senator Runciman: You mentioned some destinations that are priority destinations, I suppose, for stolen vehicles. Is there any effort at a government-to-government level to do something about that?
Mr. Dubin: There is. Some jurisdictions were more successful in bringing them back. We have a treaty with China. We brought some vehicles back from China. We bring vehicles back from Amsterdam, Belgium and the United States. We have reciprocal agreements.
Right now, a huge volume of vehicles is going to West Africa. The chance of getting those vehicles back is extremely poor. With the huge volume going, a majority going to Nigeria and Ghana and other places in Western Africa, our chances of recovering those vehicles is poor.
Senator Runciman: I read something about the newer cars and the requirement for disabling devices and GPS locators in some of the high-end vehicles. Are those devices not having any kind of impact at all? How do they get around that?
Mr. Dubin: The electronic immobilizers are probably responsible for a reduction in auto theft of about 15 per cent between 2007 and 2008. That is the good news story. The bad news story is that reduced recovery rates are an ongoing trend that has existed for several years, which indicates the involvement of organized crime.
Mr. Prouse: They are more resourceful in getting your keys. If a thief has your keys, those devices are less effective. They will target the keys for expensive, high-end vehicles.
It is the whole shift in auto theft. Mr. Dubin talked about that in his introductory remarks. Auto theft has become a business and has moved to target high-end vehicles. Perhaps slightly fewer vehicles are being stolen, but the thieves' efforts towards getting higher-end vehicles are being redoubled. We are seeing a lot of break-ins into homes because they are looking for keys.
Mr. Dubin: We are also seeing a lot of warm-ups on driveways; people leave their vehicles running unattended in the driveway in cold weather. When they go to their favourite doughnut shop, they leave their vehicle running unattended. We run a program with the police called Lock It or Lose It, telling people not to do that. The other thing is that vehicles can be towed away.
Another concern we have is that the thieves are innovative, and this is why you have to stop them at the port. Recently, vehicles are being stolen where the owners still have the keys, even with immobilizers in the vehicles. We are concerned now because the thieves are innovative. Somehow, they are finding a way to code the keys, even with immobilizers. This is not happening in high volumes, but we are seeing a certain number of vehicles, and it raises some concern. We are pulling them off at the port, and the owners' original keys are not with the vehicle.
The Chair: Senator Runciman, you were asking about ministerial disclosure. Just for the record, I think the section in question is in the Customs Act, subsection 107(6). It provides that the minister may disclose information if the public interest in doing so outweighs invasion of privacy.
Senator Baker: I want to come back to the subject of the vehicle identification number. You said you have access to the secret locations, called the secondary vehicle identification number. There was all the publicity from the Times Square incident in New York, where an accused had gotten onto an aircraft and had almost gotten to the point of leaving the United States. However, they stopped him because of that secondary vehicle identification number that you have access to.
I understand that in the car manufacturers there is a general agreement that someone is assigned just to go around and put in that secondary vehicle identification number. Could you confirm for the committee whether it is seventeen numbers and letters, and tell us what they signify?
Mr. Dubin: There are 17 numbers, placed on different areas throughout the vehicle. They are changed by the vehicle manufacturers intentionally to keep trying to throw the criminals off. There are 17 digits. They tell you the make, model and year of the vehicle, the specific type of the vehicle and when it came off the line. Therefore, you know exactly where and when it was manufactured and the specific the type of vehicle it was.
Senator Baker: Could the keys to that vehicle also be identified with the vehicle identification number?
Mr. Dubin: No. The key is a separate issue.
In the first bombing of the World Trade Center, they were able to capture some of the individuals involved because of the secondary number. It is similar to this situation.
Senator Baker: You have access to this secret location for this vehicle information number and you referenced the vehicle identification number at several points in your address and talked about how important that is in the general scheme of things.
You have not addressed this here before this committee, and I suppose that it is an extraneous subject for you and that you do not wish to displace the importance of getting the legislation passed instead of concentrating on a defect that is in the legislation. However, I know you have heard the criticism of a particular clause of the bill by police forces and investigators.
Mr. Dubin: Yes.
Senator Baker: You have heard about it. You have declined to date to comment on it, because I believe you are finally seeing something that you have worked on over the years come to fruition in this bill, and you do not want to concentrate on defects in it. I am sure that in the normal progress of this bill this committee will be hearing from police officers who lay the charges.
Do you have any comments at all on the two criticisms? The first criticism was raised by Senator Carignan, who questioned why, with the removal of the VINs or altering VINs, parts of vehicles were not covered in this legislation. Second, the bill offers a new defence for these thieves, and it defeats the purpose of the legislation. You have heard this over and over.
Do you have any thoughts at all? You do not have to comment if you do not wish to.
Mr. Dubin: First, the secondary numbers are present on several areas of the vehicle. Does the Insurance Bureau of Canada support massive parts marking with identification of some kind that could later relate to a database of VINs and be a benefit to a vehicle to identify in a chop shop every part that was stolen? Yes, we support that, but that is getting manufacturers online to agree to apply a process online where all parts are tagged. That does exist in Australia. It is called DataDot. We do support parts marking.
To answer your first question, that is a benefit for identifying stolen parts once they are chopped in chop shop operations.
The second thing you referred to I think is the tampering with or destruction of a VIN ``without lawful excuse.''
Senator Baker: You identified it.
Mr. Dubin: My own view is that the section will have a lot of merit, even without the words ``without lawful excuse.'' I have heard the arguments of law enforcement. Let us face it; in a criminal charge, it is a responsibility of the prosecution to prove mens rea, anyway. Therefore, the prosecution would have to prove, if people did tamper with a VIN, that they did it with a criminal intent.
There are arguments on both sides, but I do not think it is critical that the words ``without lawful excuse'' are in that section.
Senator Baker: ``Without lawful excuse'' is at the beginning of the clause 4, proposed new subsection 353.1(1): ``. . . without lawful excuse, wholly or partially alters, removes or obliterates a vehicle identification number on a motor vehicle.'' Then further down in subsection (3) it goes to what you are referring to, which is that this does not include vehicles that are in for repair, for legitimate reasons or for the modification of vehicles. This provision does not apply.
Are you saying that you could take out one of them without interfering with the other?
Mr. Dubin: My point is that we know there will be repairs on vehicles that could affect the location of the VIN or the VIN itself. That is a legitimate thing. However, in order to convict them and lay a charge, you have to prove the criminal intent. I think it is as simple as that.
Mr. Prouse: You were onto something earlier. Do we want to let the perfect be the enemy of the good here? No. It has been two governments, three elections and any number of parliaments, and we still cannot get a law passed to make it illegal to tamper with a VIN. If you let me keep going, I will show you a little bit of frustration.
We would like to get this passed, and we are perfectly willing to see this section try to work as opposed to getting caught on just that. We do not have a law in Canada at present making it illegal to tamper with a VIN. I tell people that and they are shocked. Will we get completely hung up on that? No. Do not let the perfect be the enemy of the good is the principle we are operating on here.
Mr. Dubin: My opinion has been that I think it will still be successful whether those words are in or out. Law enforcement is taking a slightly different approach, but we are just as comfortable leaving it in knowing you will still have to prove why they tampered with a VIN.
Senator Baker: When you were asked this question in the House of Commons committee, your answer was — no, this was not you.
Mr. Dubin: No, it was not us. We did support it overall.
Senator Baker: You were not asked the question directly on this particular point.
Mr. Dubin: No, we were not.
Mr. Prouse: I believe the people who were asked that were — correct me if I am wrong — the manufacturers of construction equipment. They were the people weighing in more heavily on that.
Senator Joyal: As you know, this is the third version of this bill. The first version did not include the words ``without lawful excuse.'' Did you support the first version of the bill at that time?
Mr. Dubin: The first version I recall of the bill — and correct me if I am wrong — did not even add the section to address the tampering, altering or destruction of the VIN. I basically spoke with Justice Canada and said, ``Since you did not get it through, in order to make this a consolidated approach to address organized auto theft, this would be a great opportunity to address the tampering of the VIN, which is a standard organized criminal activity and is not currently in the Criminal Code.''
Senator Baker: The word ``modification'' is there. In other words, it is legal to remove or alter a VIN in the modification of a vehicle. For some people, ``modification'' has a specific meaning in case law. It is very complicated. You can modify something easily, and it provides an adequate excuse for it.
The point is that you would prefer to have the police officers, those who lay the charges, and the Crown, rather than yourselves, address the particular question as to whether or not that particular subsection we are referring to is of benefit. Is that right?
Mr. Dubin: Honestly, I do not think it will make a difference one way or the other if those words are in or out, because I think we know what the intent of the section is, and I think prosecutors and law enforcement will carry that through. I do not object to the position that law enforcement takes with regard to ``without lawful excuse.''
Senator Housakos: Thank you for your presence here today and thank you, in particular, for your support on this bill. I thank you for not falling into the easy trap that one can fall into and become cynical and critical and try to find fault with something when the reality is that Bill S-9 is a giant step forward. I think we should commend the government for having the courage to bring it forward. What is more pleasing than to have support from people in the industry who represent the victims of this terrible crime right across the country? I thank you for that.
Above and beyond the legislation, what needs to be done to try to put more holes into this growing industry's strategy? I know that through the years the insurance companies have encouraged people to buy into the idea of installing alarm systems. As you mentioned earlier, there has been some benefit to that.
As I am from Montreal, I go back to the example of Montreal. By and large, I think we all agree the majority of cars stolen in Montreal right now are usually affordable cars that are sold at large, cars that can be broken down, shipped off and easily have their parts sold for profit. However, there is also obviously a growing phenomenon in the high-end luxury car industry, where the big thing now is they lift the car and off they go. I have also seen that in Montreal. You alluded to that earlier.
What steps can the government take in order to be helpful and try to put holes into this industry's strategy? For example, would it be helpful if we obliged the automotive industry to install GPS and alarm systems? I know it has been talked about. Obviously the industry is adamantly opposed because it would have to pass on the cost to the citizen.
In your opinion, would there be a cost savings overall if we put an end to some of the activities criminals are successfully doing now that yield billions of dollars of profit and where that cost is passed down to people who buy insurance and others down the line anyway?
Mr. Dubin: You are correct. Initially, I was involved in supporting electronic immobilizers to make it more difficult to steal cars. We were running a voluntary program, and it ended up being mandated by Transport Canada for September 1, 2007. That has been positive and probably the reason for the significant reduction.
At least in catching stolen vehicles, I think parts marking would be beneficial overall, not only in catching the criminals, but if they saw that you were obtaining the property in chop shops and doing arrests, it would send a strong message out there.
The Insurance Bureau of Canada supports a layered approach to GPS. We will not tell people that we want them to install it, but there is no question that GPS is a good thing. I do not know whether enough studies have been done on the overall recovery results because of a GPS, but if the theft is reported quickly, there is an increased opportunity to recover the vehicle.
We are running a program right now with Genetec called AutoVu, which is licence plate reader technology. We are into an agreement with Montreal, and it will be launched in a pilot very soon. We have been running it in Toronto and Hamilton successfully, with over $30 million worth of stolen vehicles being recovered since 2002-03.
Those are a few examples. Public awareness is also a key point. We have seen that law enforcement has backed off auto theft. They had more individuals in auto theft units, and we have seen across Canada that many of them have reduced their resources and backed out of auto theft. One thing that would be helpful is more of a joint forces approach and the recreation of some units in municipalities to address auto theft, which would be a positive thing.
Senator Lang: I would like to follow up on the previous question. With this new legislation coming into effect, assuming it is passed, how comparable is our legislation with that of the United States?
Mr. Dubin: That is a great question. I am pleased you asked that. With the passage of this bill, which will give Canada Border Services Agency that specific ability to identify and seize stolen vehicles and create what we are hoping is a partnership at the ports between law enforcement, the Insurance Bureau of Canada and the CBSA, we will be miles ahead of the United States. The U.S. is not all that effective at the ports. I know this because we sit on the board with the National Insurance Crime Bureau in the United States and we are partners of the North American Export Committee. They are looking to us to set the example. Once this bill is passed, hopefully, they will ask the Insurance Bureau of Canada to assist them in the United States to implement similar programs there.
Mr. Prouse: On a larger scale, it is probably worth noting that although we do not have recent statistics, as of 2005, the per capita auto theft rate in Canada was 25 per cent higher than the rate in the United States. Most people are shocked to hear that. The odds of having your vehicle stolen are significantly higher on a per capita basis in Canada.
Senator Lang: I have had a car stolen.
Mr. Prouse: That figure shocked many people. You want to look at the larger figures. Between 1985 and 2005, Statistics Canada found that auto theft almost doubled in Canada. It has dropped slightly in the last few years. Technology has played a large role in that. Around the mid-1990s, we crossed over and started having a significantly higher auto theft rate that that of the United States. The average Canadian would be surprised.
Senator Joyal: I return to the statement in your brief at page 2 that Montreal has the lowest recovery rate. I want to link that to the comment at the top of page 3 of your brief where you state: ``Unfortunately, this is just the tip of the iceberg because this was accomplished with very limited resources.''
You were talking about recovered high-end vehicles. I believe you were in the room today when the CBSA officials testified.
Mr. Dubin: Yes.
Senator Joyal: I have the impression that the resources are available to the various police forces, federal, provincial and municipal, across the country in the major cities of Winnipeg, Montreal, Toronto and Vancouver, as well as the border agencies, but that the priority is not there.
Mr. Dubin: For exports.
Senator Joyal: Yes. I have the impression that with the variety of crimes that the police have to pursue, they prioritize their resources to certain areas. In some areas, as you say, it is a lesser crime in its impact because the crime is not in persona but in rem. Certainly, fewer resources are devoted to fighting that crime than what are needed, given its increasing frequency.
Mr. Dubin: I would say that because of the somewhat best practices implemented in the ports of Montreal and Halifax as a result of the pilot that started in 2009, the CBSA has been quite effective in identifying a significant volume, but, certainly, it is only the tip of the iceberg.
I think more resources should be placed at the ports, especially if there is more intelligence information to be analyzed, which means that more containers will be pulled. We are prepared to work with the CBSA in terms of additional resources.
However, I do not want anyone to think that the CBSA has not been pretty effective with the minimum resources it has had. The people there have done good work with their limited resources. Yes, I support the need for more resources to be effective, in particular if they are going to open up at the Port of Vancouver. Only a few weeks ago, it was reported to us that nine high-end vehicles stolen for export were seized based on a tip by the IMPACT team. They were stopped from export out of Vancouver. No one knows how high that volume is.
Mr. Prouse: Mr. Jolicoeur, a former president of the CBSA, spoke to us at committee a few years ago about opening containers. He said that we do not need to open all the containers, just the right ones. That was a great line. We want to apply that to this situation. With good technology, good data sharing and good law, we can take a further bite out of this problem. I will always remember that. You do not have to open all of them, just the right ones.
Mr. Dubin: The key to limiting the number of containers and getting the right containers is intelligence. You do not have to see all the containers. Working and sharing with CBSA has worked extremely well. The intelligence exists, but it can be improved. Even with the limited resources they have, the difference in where we are today compared to where we were in 2008 is like night and day.
Senator Joyal: The resources are still an essential element for efficiency to meet the objective of the bill, which is to reduce the level of crime and to catch the perpetrators.
Mr. Dubin: It will very much meet the purpose of the bill. Can it be improved so that more vehicles are spotted? Absolutely, but we are certainly headed in the right direction. This bill supports what has been done. Even with the resources they have, with improved intelligence they will be able to find a significant volume of stolen vehicles prior to export.
Senator Joyal: According to you who monitor that, in two or three years, you will be able to show the level of recovery and the number of disbanded gangs from that field.
Mr. Dubin: Yes, we track it carefully. I support additional resources at these ports to make the bill as effective as it possibly can be, rather than work with the somewhat limited resources of the current situation.
[Translation]
Senator Boisvenu: You know, stolen vehicle trafficking is very similar to drug trafficking. The container full of stolen vehicles belongs to organized crime. But often, the cars were at the outset stolen by young people, minors, because the adult who manages the luxury car container knows that the youth who gets caught will receive a ridiculous sentence.
The same thing applies to drugs. The drugs that are now sold in primary and secondary schools are often sold by minors, young criminals hired by adults; the youngsters sell it because the adult knows that if a youth is caught and sentenced, that sentence will be very light. What is important in this bill is that sentences will be harsher, so that young people who steal cars will be afraid to get caught.
When you were saying earlier that police officers no longer intervene where cars are concerned, it is not necessarily because they lack the resources or have other priorities. Rather, it is because the sentences are ridiculous; they catch the same thieves over and over again, the same young hoodlums are sent before the judge year in, year out, and the police officers finally give up. They do not want to investigate stolen cars because they know that there is a legal void in the Criminal Code in this regard.
The police officer who sees the same criminal five times during the same year because he has stolen a car and has already served his six-month or two-year sentence in the community is no longer interested in working on that file. He prefers to work on more important issues, comparatively speaking, where sentences will be stiffer, such as sexual assault cases or other issues.
In that sense, the bill is important because it brings sentences up to a normal level, so that people will be afraid to get caught. Currently, those who steal cars are not afraid to get caught.
So according to you, would the fact that sentences will be heavier have an impact on reducing crime?
[English]
Mr. Dubin: Yes, we are convinced. You are absolutely correct; there is no deterrent right now for repeat offenders who are stealing cars. It is a revolving door. They are going in and out of the justice system. We are convinced that building a strong deterrent, such as what is in Bill S-9, will play an important role in making all individuals think twice before getting involved in organized auto theft.
I know that because we met with a professional auto thief in the Brockville prison a few years ago. I spent a day interviewing him on video. He had been doing it for 30 years and made $300,000 tax free a year. We asked him, ``If the system was tough in a deterrent and you got serious jail time once you turned into that repeat offender, would you have continued in stealing cars?'' He said that without any doubt in his mind he would not have continued in auto theft had they been tough with him. He said that when conditional sentences and house arrest are given, and they are hardly held, they go out and start stealing cars all over again and do it in a group. Unfortunately, he thought the justice system was just so lenient there was absolutely no risk in their activity. Therefore I agree with you.
Senator Boisvenu: Thank you.
The Chair: Have you ever found any statistics on the sentences? I have seen conflicting statements, and there is some difficulty because, at the moment, car theft is not singled out by Statistics Canada for tracking as a separate offence, as I understand it, although we will be hearing from Statistics Canada as well.
Have you compiled any statistics in the insurance industry about the judicial consequences?
Mr. Dubin: No, but we continue to see all of the decisions for those who were charged and convicted in auto theft. At least I can say very much so in Ontario, as a perfect example. The greatest amount of auto theft is in Ontario and Quebec: Approximately 31,000 cars were stolen in each of those provinces in 2008, to give you an idea. We follow the decisions. Unfortunately, it is extremely rare for individuals to get any form of serious jail time, and that is why we think this bill is so important.
The Chair: What do you consider serious jail time?
Mr. Dubin: Any jail sentence. Most of them are not getting any jail sentence. They are getting conditional sentences and minor house arrests, and they are put on probation. As a matter of fact, two individuals over the last month were re-arrested and put into custody because when they were let go on probation, they broke their probation order.
Mr. Prouse: One huge, complicating factor is that 40 per cent of those charged with auto theft are young offenders. We hear anecdotally that organized crime hires young offenders as their employees essentially to steal these vehicles. They get paid on a per-vehicle basis. They make ideal employees for organized crime because they are out quickly, and the organized crime does not have to be directly involved.
That is why Mr. Dubin talked about a layered approach. There must be many facets to dealing with auto theft. There is not one magic bullet that will address all of this. It is a complex issue, and as with any complex issue, a number of different approaches must be taken.
The Chair: No magic bullets anywhere in life, I guess.
Mr. Prouse: No.
The Chair: Thank you both very much indeed. It has been extremely helpful and extremely interesting.
Mr. Dubin: Thank you.
The Chair: Colleagues, I will ask you to sit still for one more minute after I gavel the end of this formal portion of the meeting just for a quick word about future business.
(The committee adjourned.)