The Hon. the Speaker: Honourable senators, I would like to
introduce a distinguished guest in our gallery: His Worship the
Mayor of Montreal, Mr. Pierre Bourque. Mr. Bourque was first
elected to office in 1994 and was re-elected in 1998. Welcome to
the Senate, Mr. Bourque.
Hon. Marcel Prud'homme: Honourable senators, I thank you
for so kindly welcoming the mayor of the oldest French city in
North America, the pillar of Quebec.
A number of senators will recall a great Senate personality,
above all a great French Canadian from Quebec, the late
Jean Marchand. He was a member of Parliament, a cabinet
minister, a senator and a Senate Speaker. He said - and it
remains true - that Montreal was the economic heart of Quebec
and that if Montreal was on track, Quebec was on track and if
Quebec was on track, it was happy; and if Quebec was happy,
Canada could only do well. We must remember these words.
I am delighted to be one of Mr. Bourque's supporters, not only
lately when things were going well, but from the moment he
arrived, in 1994. I never left him. You will recall that I requested
permission to say a few words the day after the election, but as
there were several senators wanting to speak, I delayed my
statement. In a sense that is just fine, because today, instead of
talking about him, I can introduce him to you.
He is someone who really understands the important role of
the city. Montreal is a city that does not want to live in the past,
it wants to live in the future. Forty per cent of its inhabitants are
not of French Canadian origin and they will soon make up
50 per cent of the population. That is an example that should be
I was glad that he met with the Prime Minister of Canada
today. He also met with the Honourable Martin Cauchon, the
Honourable Sheila Copps and others.
Mr. Bourque has an excellent rapport with the public. You will
recall the press all predicted last May that he would not be
He had 13 per cent in May and ended up winning with
44.2 per cent. Yet, there are still those who say he does not have
a clear mandate. Mr. Bouchard received 42.7 per cent of the vote
and he is the Premier of Quebec. The Prime Minister of Canada
was elected and went unchallenged with 38.5 per cent.
Mr. Mayor, with your 44.5 per cent, you can go forward. All
the senators from Montreal, Conservatives and Liberals alike,
together with the members of Parliament, support you and want
to work together to make life easier in Montreal. I repeat:-
If Montreal is happy, Quebec will be happy, and if Quebec is
happy, Canada will be happy.
Ninth Anniversary of Tragedy at l'École Polytechnique
Hon. Joyce Fairbairn: Honourable senators, this is the ninth
anniversary of an act of violence against women that was so
shocking and tragic that it has become a symbol for action across
this country ever since.
The Montreal Massacre, as it is called, occurred on
December 6, 1989, an ordinary day as students attended their
classes and socialized in the cafeteria at l'École polytechnique.
The normalcy of their lives was shattered by an individual so
unhinged by his own problems that he took a semi-automatic
rifle into a classroom, separated out the men and, proclaiming his
hatred of feminists, he gunned down 14 young women. He killed
himself as he ended their hopes and their dreams for the future.
Once again, we quietly recall their names: Geneviève Bergeron,
Hélène Colgan, Natalie Croteau, Barbara Daigneault,
Anne-Marie Edward, Maud Haviernick, Barbara Marie Klueznick,
Maryse Laganière, Maryse Leclair, Anne-Marie Lemay,
Sonia Pelletier, Michelle Richard, Annie Saint-Arnault and
Behind those names are the families and friends who will
never forget, joined by women and men who will gather this
weekend at ceremonies across the land to reinforce a
commitment to break the violence in our society.
The sad legacy of these young women is now the National
Day of Remembrance and action on violence against women. As
always, we look to the statistics, hoping they will be improved
but knowing that they still remain distressingly high - statistics
about sexual, psychological and physical abuse, and violence,
assault, harassment, stalking, murder.
Women of all ages, from children to elders, are constant
targets for violence. We have enacted gun control; we have
stiffened many penalties under the law; we have set up protective
homes; we have raised awareness through every medium of
education, but clearly we have fallen far short of changing the
attitudes and the social and economic conditions that foster fear,
insecurity and desperation which, in turn, breed anger and
Honourable senators, this is not just a women's issue. Men are
victims, too, because those attitudes and conditions cut through
our entire society, hitting hardest at the most vulnerable. It is
important that all of us in this chamber, women and men
together, use every opportunity offered by our privileged
positions to support solutions and force change.
Our only tolerance must be zero tolerance against all forms of
violence in what we like to think of as a caring and
compassionate country. Those 14 young women, honourable
senators, would be telling us to cut the excuses and get on with
Hon. Senators: Hear, hear!
Hon. Shirley Maheu: Honourable senators, this Sunday will
be the ninth anniversary of the deaths of 14 young women, cut
down in the prime of life at Montreal's École polytechnique. For
many of us, December 6 is a day to reflect upon violence
Today, honourable senators, we shed a tear in remembrance as
we think about these young women who will never have a
chance to fulfil their dreams, and the hopes and dreams of their
parents, because their lives were cut short so abruptly and
brutally. I would ask you to join with me in expressing to the
families and friends of these young victims our compassion and
sorrow, coupled with the hope that this act of remembrance will
help educate the public, and lead one day to the eradication of
such acts against women.
Report of National Finance Committee on Supplementary
Estimes (B) Presented and Printed as Appendix
Hon. Terry Stratton: Honourable senators, I have the honour
to present the seventh report of the Standing Committee on
National Finance concerning the examination of Supplementary
Estimates (B), laid before Parliament for the fiscal year ending
March 31, 1999.
I ask that the report be printed as an appendix to the Journals
of the Senate of this day, and that it form part of the permanent
record of this house.
The Hon. the Speaker: Is it agreed, honourable senators?
Hon. Senators: Agreed.
(For text of report see today's Journals of the Senate,
Appendix `A', p. 1144.)
The Hon. the Speaker: When shall this report be taken into
On motion of Senator Stratton, report placed on the Orders of
the Day for consideration at the next sitting of the Senate.
Hon. David Tkachuk, Deputy Chairman of the Standing
Senate Committee on Banking, Trade and Commerce, presented
the following report:
Thursday, December 3, 1998
The Standing Senate Committee on Banking, Trade and
Commerce has the honour to present its
Your committee, to which was referred Bill C-20, an act
to amend the Competition Act and to make consequential
and related amendments to other acts, has examined the said
bill in obedience to its Order of Reference of Tuesday,
November 17, 1998, and now reports the same without
amendment but with the observations which are appended to
DAVID TKACHUK Deputy Chairman
(For text of appendix to report, see today's Journals of the
Senate, Appendix `B', p.1154.)
The Hon. the Speaker: When shall this bill be read the third
On motion of Senator Callbeck, report placed on the Orders of
the Day for third reading on Tuesday next, December 8, 1998.
Notice of Motion to Authorize Agriculture and
Forestry Committee to Table Final Report with Clerk of
Hon. Leonard J. Gustafson: Honourable senators, I give
notice that on Tuesday next, December 8, 1998, I will move:
That with respect to the Order of the Senate adopted on
May 14, 1998 to examine the Recombinant Bovine Growth
Hormone (rBST) and its effect on the human and animal
health safety, the Standing Senate Committee on Agriculture
and Forestry be permitted, notwithstanding usual practices,
to deposit its report with the Clerk of the Senate, if the
Senate is not then sitting; and that the report be deemed to
have been tabled in the Chamber.
Hon. A. Raynell Andreychuk: Honourable senators, I give
notice that on Tuesday next, December 8, 1998, I will move:
That rule 86(1) of the Rules of the Senate be amended by
inserting immediately after paragraph (q) the following new
(r) The Senate Committee on Human Rights and
Fundamental Freedoms, composed of twelve members,
four of whom shall constitute a quorum, to which shall
be referred, on order of the Senate, bills, messages,
petitions, inquiries, papers and other matters relating to
the protection of human rights and fundamental
The Roman Catholic Episcopal Corporation of Mackenzie
Bill to Amend-Report of Committee
Leave having been given to revert to Presentation of Reports
from Standing or Special Committees:
Hon. Lowell Murray, Chairman of the Standing Senate
Committee on Social Affairs, Science and Technology, presented
the following report:
Thursday, December 3, 1998
The Standing Senate Committee on Social Affairs,
Science and Technology has the honour to present its
Your committee, to which was referred Bill S-20,An Act
to amend the Act of incorporation of the Roman Catholic
Episcopal Corporation of Mackenzie, has, in obedience to
the Order of Reference of Thursday, October 29, 1998,
examined the said Bill and now reports the same with the
1. Page 1, Preamble: replace line 9 with the following:
"of Mackenzie was erected into the Diocese of
Mackenzie-Fort Smith by".
2. Page 1, Clause 1:
(a) replace line 27 with the following:
"1. The long title "; and
(b) replace lines 30 to 32 with the following:
"An Act to incorporate the Roman Catholic Episcopal
Corporation of Mackenzie-Fort Smith".
3. Page 2, Clause 2:
(a) replace line 1 with the following:
"2. Section 1 of the"; and
(b) replace lines 3 to 9 with the following:
"1. The Right Reverend Gabriel Breynat, and his
successors, being Vicars Apostolic of the Vicariate
Apostolic of Mackenzie and Bishops of the Diocese of
Mackenzie-Fort Smith, in communion with the Church of
Rome, are hereby incorporated under the name of "The
Roman Catholic Episcopal Corporation of Mackenzie-Fort
Smith", hereinafter called "the Corporation".".
LOWELL MURRAY, P.C. Chairman
The Hon. the Speaker: Honourable senators, when shall this
report be taken into consideration?
On motion of Senator Murray, for Senator Taylor, report
placed on the Orders of the Day for consideration at the next
sitting of the Senate.
Treatment of Protestors at APEC Conference by
RCMP-Possibility of Referral of Subject-Matter to
Senate Committee-Government Position
Hon. Noël A. Kinsella (Acting Deputy Leader of the
Opposition): Honourable senators, last night on CBC's
The National Magazine program, University of Ottawa Law
Professor Ed Ratushny stated:
- unrealistic expectations...may also be generated in
Parliament by the suggestion that we should wait for this
inquiry to conclude, and that it will provide all the answers.
It won't. And there is a political dimension of this that is
certainly relevant to political debate right now. The
accountability of the Prime Minister and the Prime
Minister's Office, if it's not within the mandate of the
commission, it certainly is within the mandate of
Therefore, will the Leader of the Government not agree to the
suggestion made by my colleague Senator Carney that the Senate
inquire into those matters that are clearly outside the scope of the
RCMP Public Complaints Commission?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, as I have stated, there is already a process
in place to inquire into the APEC events in Vancouver. The
government has full confidence in the RCMP Public Complaints
Commission. The commission is an independent body over
which the government has no control. Even if it wanted to stop
the inquiry, the government does not have the authority to do so.
We have received varying opinions on this subject. Senator
Kinsella has cited one that was given on a CBC program last
night by Professor Ratushny. But there is another opinion which
I received recently.
I will read a few paragraphs of a letter, a copy of which I
would be happy to table. It comes from a well-known body,
namely the British Columbia Civil Liberties Association. It is
dated November 30, 1998, and it is addressed to me. Perhaps the
Leader of the Opposition already has a copy of the letter.
It states, in part:
Dear Mr. Graham:
Re: RCMP Public Complaints Commission Hearings Into
the Events Surrounding the November 1997 APEC
In recent weeks, there have been calls for Parliament to
halt the RCMP Public Complaints Commission (PCC)
hearings into events surrounding last year's Asia Pacific
Economic Cooperation (APEC) conference and replace
them with a judicial inquiry. The B.C. Civil Liberties
Association (BCCLA) is opposed to such action.
They go on to give a number of reasons, all of which I will not
Senator Carney: Read some.
Senator Graham: If honourable senators agree, I will be
happy to table the letter.
The letter goes on to state:
As a complainant before the current PCC hearings, the
BCCLA is especially concerned with discovering the truth
about these allegations. However, because of the many
delays, some people have given up hope that the PCC is still
capable of bringing this truth to light. Indeed, one
complainant has called for the resignation of hearing
panellists in the hope that this will force the government to
appoint an independent judicial inquiry.
The BCCLA does not share this view. While we have
been critical of some aspects of the PCC hearing process,
including the lack of legal funding for complainants, we are
equally concerned with what may happen should the PCC
not be allowed to complete its task.
If the PCC is not permitted to continue its hearings, this
would not only signal to the public its lack of ability to
investigate events surrounding APEC, it would also serve to
undermine the important role that the PCC plays more
generally as a mechanism for effective civilian oversight of
It is important to remember that the PCC hearings have a
predominantly fact-finding role. A wealth of evidence has
been assembled and 120 witnesses will be called -
I presume among them will be the Prime Minister's Chief of
Staff and the former director of operations.
- to testify under oath about the events last Fall and be
cross-examined on their testimony by lawyers, including
those acting for the BCCLA. It is clear that the PCC has the
mandate and the will to complete its task.
In our view, PCC hearings have several advantages over
other forms of investigation:
In the interests of brevity, I will skip the points they raise
there. The letter then goes on to state:
In addition, there is little reason to think that abandoning
the current process in favour of a judicial inquiry would
result in matters being dealt with more quickly or more
thoroughly. A judicial inquiry would be subject to the same
sorts of challenges and legal manoeuvring as is the PCC. To
abandon the current process in the face of delay would, in
the future, encourage any party to a Commission process
which had extensive legal resources and which was
concerned about a possible negative outcome, to use its
resources to derail this process.
They feel so strongly about the issue that, in the concluding
paragraph, they say:
...should a court decide that the current PCC panel is unable
to continue, we favour the immediate appointment of a new
panel to hear our complaints. It should not be up to the
government of the day, or the RCMP, to decide when and
how such complaints are to be investigated.
In short, we have unfinished business with the PCC, and we
are not prepared to stand idly by and see this process
The letter is signed by Andrew Irvine, President. My copy
indicates that it has been forwarded to the RCMP Public
The honorary directors of the British Columbia Civil Liberties
Association include some well-known and highly respected
Canadians, including David Barrett, Ron Basford, Q.C.,
Thomas Berger, Q.C. -
Senator Carney: They are all socialists!
Senator Graham: - Kim Campbell, Andrew Coyne, Gordon
Gibson, Mike Harcourt, Rafe Mair, Svend Robinson, and
David Suzuki, among many other outstanding Canadians.
With the permission of the Senate, I would be happy to table
Some Hon. Senators: Hear, hear!
The Hon. the Speaker: Honourable senators, is leave granted
to table the document?
Hon. Senators: Agreed.
Senator Kinsella: Honourable senators, I am glad that we
now have at least one document on this tragedy in this chamber.
Where should I begin? Perhaps I should begin with other parts
of the letter. For example, the last paragraph on page 2 helps to
paint the association`s great concern about relying on the RCMP
Public Complaints Commission, which is the best game in town
for them. Why? Because they are fearful of a judicial inquiry.
What do they say? The Public Complaints Commission is,
"Unlike a judicial inquiry whose mandate could be set by the
cabinet in such a way as to avoid politically sensitive questions."
They are very wise and astute.
Furthermore, on the next page, they state:
Unlike a judicial inquiry which may be stopped
prematurely by the government of the day - as was the
Somalia inquiry - ...
One can understand why this particular complainant, which
will appear before the Public Complaints Commission, would not
want to go the route of a judicial inquiry.
The Honourable Leader of the Government drew our attention
to the fact that Mr. Svend Robinson is one of the patrons of the
association. Last night, on the same CBC program, Mr. Robinson
stated that former prime minister Mulroney "understood and
respected the fact that we had a role...as opposition members of
parliament and government members of parliament, to try and
get at the truth."
I wish to tell honourable senators and the Leader of the
Government in the Senate that we had the MacDonald Royal
Commission into the RCMP wrongdoing in the 1970s. Whilst
that commission was ongoing, the House of Commons Justice
Committee went forward and heard from witnesses. We also had
the Krever inquiry. It did not prevent the government from
addressing the need for changes to the blood system whilst that
was going on. Indeed, there is the El-Mashat affair. While that
was being adjudicated, Parliament was given the opportunity by
Prime Minister Mulroney to get at the truth. In the words of the
current Minister of Foreign Affairs, who will be here later this
afternoon - and, perhaps this will remind him of what he said in
1991 - will we get at the truth or not?
If we did not wait for Parliament to become involved then,
although commissions and other fora were dealing with the
matters of abuse, why are we waiting now?
Senator Graham: Honourable senators, I am merely
suggesting that we ask that due process be followed with both the
Public Complaints Commission and the Federal Court. There are
several matters before the Federal Court. I have full confidence
in both bodies, and I would certainly not want to circumvent the
important work that they have to do.
Hon. David Tkachuk: Honourable senators, I have two
supplementary questions. I think a lot of members on this side
understand it, but I do not.
Is the Leader of the Government in the Senate saying that the
RCMP inquiry into the APEC affair has the right to call
witnesses who work for ministers of the Crown to ask them
about their role in this matter?
Senator Graham: Yes. Honourable senators, in my opinion,
they have that right.
Senator Tkachuk: If the commission were investigating the
conduct of the RCMP in their investigation of the Airbus affair,
then they would have the right to call officials of the government
and the Crown - whomever they wanted according to your
statement - to appear and testify about their role in that
investigation. Is that correct?
Senator Graham: Honourable senators, that would be up to
the body that was making the inquiry and was charged with that
responsibility, depending on the mandate of that particular
commission. The mandate of the Public Complaints
Commission, which I outlined the other day and I repeat, is to
inquire into all matters relating to these complaints.
Senator Tkachuk: Therefore, honourable senators, in some
cases they do and in some cases they do not, depending on what
the government feels they should or should not do. Is that
Senator Graham: No. It depends on the mandate.
Hon. Pat Carney: Honourable senators, should the Leader of
the Government in the Senate be correct in his interpretation, of
course we would honour it. However, should the minister be
wrong in his interpretation and the Public Complaints
Commission declares itself unable to deal with these political
matters of political staffs and political direction, would the
Leader of the Government in the Senate commit, on behalf of the
government, to supporting hearings by the Senate into this issue?
Senator Graham: Honourable senators, it would be
presumptuous and hypothetical for me to try to judge what may
happen in the future. However, we would certainly be prepared
to deal with the matter at that particular time.
Hon. Ron Ghitter: Honourable senators, I have a
supplementary question. In that the Leader of the Government in
the Senate places such emphasis on the letter that has been tabled
today, would he also agree with the following portion of the
As the attached documents show, there is also strong
prima facie evidence to think that the PMO is not a neutral
party in these proceedings. These documents have been
culled from the thousands of pages of evidence that have
been tabled before the PCC. We believe that they are
relevant to our complaints since they lend support to the
view that fundamental free speech rights of Canadian
citizens may have been compromised, and that there may
have been improper attempts on the part of the PMO to use
the RCMP to advance political objectives.
In that the Leader of the Government in the Senate seems to
agree with everything else in the letter, does the minister also
agree with that paragraph?
Senator Graham: Honourable senators, we agree with the
main point of the letter. The main point of the letter, Senator
Ghitter, is that until a full examination of the documentary
evidence has taken place before the Public Complaints
Commission, we will not know the full truth.
Senator Ghitter: Honourable senators, I have one final
supplementary question. Is it then agreed that if the Prime
Minister is asked to appear to give testimony, he will appear?
Senator Graham: That would be up to the Prime Minister.
Vintage of Labrador Helicopter Fleet-Possibility of
Leasing Replacement Aircraft to Undertake Search and
Rescue Missions-Government Position
Hon. J. Michael Forrestall: Honourable senators, I have a
question for the Leader of the Government in the Senate. He will
have noted the grounding of additional helicopter aircraft, this
time because of faulty screws that could be catastrophic were
they to wind up in the engines of those helicopters.
Yesterday, honourable senators, the minister said that the
oldest part contained in the Labradors is the number plate and
that is not 35 years old. It is a wonder sometimes that the Leader
of the Government in the Senate believes everything that he
reads in his briefing book.
Does the Leader of the Government truly believe that this is
the case? Will he not admit that the airframes of those
helicopters, the ribs, the substantial undercarriage, are the
original design, part of the original aircraft, and that they are
technology from the 1950s? Will he not admit that those planes
are too old to be flying?
I would ask the honourable leader to respond to that comment.
It is nonsense to say such things if he is not prepared to back
them up. In particular, he should not say such things if he does
not know what he is talking about, because that can mislead
Could the Leader of the Government in the Senate shed any
further light on the suggestion that the Minister of National
Defence and the government are actively considering the leasing
of equipment to replace the Labradors, until such time as they
have either grounded those aircraft and put them to rest forever,
or we have new equipment?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, the number to which I was referring was
the serial number. We remain confident that we can perform
search and rescue missions with current Canadian Forces assets.
Senator Forrestall: What does that mean?
Senator Graham: However, as I have said, if additional
resources are required to carry out search and rescue missions,
the government and the Department of National Defence would
be prepared to entertain a range of options, including leasing.
Senator Forrestall: I am not sure, honourable senators, what
all of that gobbledegook is about, except evasiveness and a
disproportionate and out-of-whack suggestion that no one gives a
damn about the men and women who fly this equipment. I doubt
very much that that is what the Leader of the Government in the
Senate is suggesting. Can he not tell us whether the government
is considering leasing equipment?
Five of the twelve helicopters are now grounded, and two
others should be grounded. Chances are that one will ground
itself permanently, and that will be the end of someone.
Senator Graham: Honourable senators, following the
incident involving the Labrador in Fredericton, where a screw
was ingested by the engine, all Labrador squadrons have been
sent an inspection notice to check the screws in question as part
of the ongoing airworthiness program.
In the opinion of the officials at National Defence, there is no
reason to ground the Labrador fleet. The incidents reported over
the last few weeks involve specific and localized problems that
can be fixed.
I repeat what I said in my previous answer, namely that leasing
is one of the options that is being examined by the military at the
Hon. Gerry St. Germain: As a supplementary question, for
clarification, I do not know how many incidents we must have
and lives lost before this matter is taken seriously. This business
of having things under consideration, honourable senators, is
fine. It is an honourable intention. However, I believe the
information that is available to Canadians and to the Armed
Forces and everyone else indicates that this is not a time for
intending to do something; we have arrived at the point in time
when we must do something.
I asked the minister yesterday if he would approach his cabinet
colleagues, in particular the Minister of National Defence, and
determine whether they will actually lease. It is not a question of
intention. These pilots are out there, and they must take
passengers and crew up with them when they go on these rescue
missions. It is not only their lives that are at stake, it is also the
lives of their passengers. This undermines their confidence, their
ability to perform their tasks in the way that they should be
performed, and their ability to perform the search and rescue
missions in the way that they should be performed.
Senator Forrestall is trying to obtain a definitive "yes." When
there is a flagrant situation such as this one, I believe that it is
incumbent upon all senators to ask the government and the
cabinet to give us a definitive answer, especially in view of the
gravity of the situation.
Senator Graham: First, the possibility of leasing is under
consideration. I discussed this matter with the Minister of
National Defence as recently as this morning.
Second, the decision to restore the Labrador fleet to full
operational availability was made by the Chief of the Defence
Staff. Full operational availability means that the fleet is
available for search and rescue operations but proficiency
training and all non-essential flying are kept to the absolute
Inadequacy of Labrador Helicopter Fleet to Undertake
Search and Rescue Missions-Accountability of Minister
for Possible Resulting Future Loss of Life-Government
Hon. Brenda M. Robertson: As a supplementary, honourable
senators, my question is to the Leader of the Government in the
Senate. I should like an answer of either "yes" or "no." We have
a Constitution in this country, and we have laws. Are ministers of
the Crown responsible for their departments, "yes" or "no"?
Hon. B. Alasdair Graham (Leader of the Government):
Senator Robertson: Thank you. The government has placed
the responsibility of flying those Labradors squarely in the hands
of the pilots, the crews, and their families. In my opinion, that is
not good enough. Government has a responsibility to the people
of Canada for ensuring that the military has safe equipment, and
that Canadians have a national search and rescue service.
The Leader of the Government in the Senate has assured us
that the Labrador fleet is safe, and that there are adequate
resources for search and rescue. In the event of another fatal
crash of a Labrador and/or death due to the lack of search and
rescue capability or readiness, which minister of the Crown is
Senator Graham: Honourable senators, I respect Senator
Robertson a great deal, but I do not think anyone wishes to
address the tragedies that occurred and lay them at the door of
one individual, no matter what position they hold in the country.
The ultimate responsibility lies with the Minister of National
Defence. However, the Chief of the Defence Staff reports to the
Minister of National Defence, and the Chief of the Air Staff
reports to the Chief of the Defence Staff. That is the chain of
The decision to restore the Labrador helicopters to full flying
capability was made by the Chief of the Air Staff, and he reports
to the Chief of the Defence Staff. The buck stops, I assure you,
with the Minister of National Defence, and he is prepared to take
Senator Robertson: I understand the line of command.
Heaven help us if we have another accident, or more lives are
lost at sea.
In that line of command, the way you stated it, do I hear
another opportunity for the government to blame someone else
down the line?
Senator Graham: Indeed not. There are chains of command,
most particularly in the Armed Forces, and they are followed
carefully. If there is any department of government where the
chain of command is followed, it is certainly in the Department
of National Defence.
The Minister of National Defence, who has an outstanding
record in Canada in all of the many offices he has held, is not one
who would want to duck his particular responsibility. We are
taking every precaution to avoid any kind of tragedy from
We talked yesterday about the sad circumstances that
surrounded the crash of the Labrador helicopter in Quebec early
Senator Lynch-Staunton is mumbling about who cancelled the
Senator Lynch Staunton: I am trying to restrain myself.
Senator Graham: He is trying to say that the present
government cancelled the contract. However, I wish to remind
you that even if the present government had gone forward with
the particular contract which the previous government had
proposed, those aircraft would still not be delivered until late
Senator Lynch-Staunton: Now it is four more years.
Hon. Gerry St. Germain: Honourable senators, the Leader of
the Government in the Senate is trying to pass the responsibility
down to the Chief of the Air Staff. This is totally wrong, because
the Chief of the Air Staff does not have the resources for this, or
the final decision-making authority on whether to lease or not
lease. That authority lies with cabinet, unless things have
changed since I came from there.
Senator Graham: Senator St. Germain, may I correct you? I
did not say that the Chief of the Air Staff has the responsibility
for leasing. The Minister of National Defence and the
government have that responsibility. I did not make that
suggestion at all.
Senator St. Germain: Yes, but you are making the suggestion
that it is the Chief of the Air Staff's decision that determines
whether these airplanes will fly for not.
Senator Graham: That is correct, but the final responsibility
rests with the Minister of National Defence.
Senator St. Germain: What you are trying to do, with all due
respect, is put the responsibility on the Chief of the Air Staff,
which is totally unfair. It is unfair to the ranks below because we
know what has happened in the military over the last few years.
The responsibility lies with the minister, and the minister should
be making those decisions, and making them immediately,
because if there are more lives lost, the responsibility will belong
to the minister and to the cabinet.
Senator Graham: In all fairness, Senator St. Germain, I do
not want to have your remarks misinterpreted by anyone in this
chamber, or by the public at large. I did not at any time suggest,
first, that the Chief of the Air Staff was responsible for making a
decision on leasing, or second, that the Minister of National
Defence was ducking his responsibility - not at all.
Mr. Eggleton is an honourable gentleman who has an outstanding
record in our country, and he is an outstanding Minister of
Senator Robertson: As a supplementary, honourable senators,
the Leader of the Government in the Senate mentioned that even
if the present government had not cancelled the order for
helicopters placed by the previous government, they still would
not be available, and we well understand that. However, let me
say this: If Brian Mulroney were the prime minister, he would
not put in jeopardy the lives of the military, or of those
Some Hon. Senators: Hear, hear!
Senator Robertson: Will this government act in the same
Senator Graham: Those honourable senators who have
followed the course of the actions that have been taken by this
government will know that a replacement for the Labradors has
Senator Lynch-Staunton: Why did you cancel the order in
the first place?
Hon. Eric Arthur Berntson: I have a supplementary.
The Hon. the Speaker: I regret, honourable senators, that the
time for Question Period has expired.
Senator Berntson: Your Honour, I have a supplementary.
The Hon. the Speaker: I am sorry, honourable senators. The
rule says that Question Period will last for 30 minutes, and the
30-minute period has expired.
Senator Berntson: I ask for leave, honourable senator, to
extend Question Period.
The Hon. the Speaker: Honourable senators, is leave
Hon. Senators: Agreed.
Cancellation of Proficiency Flying of Labrador
Helicopter Fleet-Government Position
Hon. Eric Arthur Berntson: Honourable senators, a couple
of supplementaries ago, my honourable colleague the Leader of
the Government in the Senate suggested that the Department of
National Defence was actively pursuing the goal of 100 per cent
availability of the Labrador fleet for the purposes of search and
rescue. In the same sentence he said, however, that proficiency
flying will be kept to a bare minimum.
Has the question occurred to anyone as to why proficiency
flying, for all intents an purposes, will not take place? It is likely
because the aircraft are not considered to be safe. If they are not
considered to be safe for training and proficiency flying, how can
they possibly be considered to be safe for search and rescue
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, as I said, that is a decision that has been
taken by the Minister of National Defence on the advice of those
who report to him.
Senator Berntson: Honourable senators -
The Hon. the Speaker: Honourable senators, leave was
granted for one question. That is what I heard.
Senator Berntson: It was for supplementary questions.
The Hon. the Speaker: That is the basis that I heard for the
giving of leave. That is the statement I heard.
Hon. Noël A. Kinsella (Acting Deputy Leader of the
Opposition): Honourable senators, I rise on a point of order.
Leave was requested to extend Question Period. His Honour
understood that leave was for only the one question to be posed
by the Honourable Senator Berntson. It was our understanding
that leave would also be inclusive of two other senators who had
stood, including Senator Oliver in particular. I noted that the
Leader of the Government in the Senate nodded, so I took it that
he and I were in agreement.
I think if His Honour the Speaker puts the question again as to
whether leave is granted for Question Period to be extended, he
will find agreement in this house.
The Hon. the Speaker: Honourable senators, if leave is
granted, under what conditions will it be granted? Is it leave for
two more questioners?
Hon. Sharon Carstairs (Deputy Leader of the
Government): Honourable senators, everyone in the chamber is
aware that this will be an extremely long day. I will certainly
commit this side to two more questions, but without any
additional supplementaries to those two questions.
Implementation of Alternative Financing Arrangements
Under Federal-Provincial Highways
Hon. Donald H. Oliver: Honourable senators, the Auditor
General says there has been poor implementation of the Minister
of Transport's directions with regard to the treatment of tolls
under federal-provincial highway programs. To quote the Auditor
Transport Canada should seek clarification of the federal
position on the treatment of alternative financing
arrangements for its highway investment programs and its
application not only to tolls but to such arrangements in
general. It should assess the need for entrenching that
position in all new federal-provincial highway agreements,
and take action as appropriate.
My question is for the Leader of the Government in the
Senate. What is this government's position on toll highways? Is it
"toll highways if necessary, but not necessarily toll highways"?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, that is an interesting question. The
agreement has been interpreted by some provinces to mean that
they can have toll highways. The matter at the present time is
being examined by the Minister of Transport with respect to tolls,
in the present and in the future.
Senator Oliver: What is the current policy?
Senator Graham: Honourable senators, the current policy is
that the tolls have been allowed in the Province of New
Senator Oliver: The auditor also had a few more criticisms.
The Hon. the Speaker: Honourable senators, I am sorry, the
understanding was that there would be no supplementary
questions. It is not for me to rule, but that was the agreement.
Usage of Standard Accounting Principles in Financial
Statements of Government-Position of Minister
Hon. Roch Bolduc: Honourable senators, can the Leader of
the Government in the Senate confirm that the Minister of
Finance will commit to respecting objective accounting standards
in submitting the government's financial statements?
Hon. B. Alasdair Graham (Leader of the Government):
Honourable senators, I am sure he always does. The Minister of
Finance is very consistent in his approach.
Senator Bolduc: I did not hear your answer. What did
The Hon. the Speaker: I believe the answer was not
understood by Senator Bolduc.
Senator Graham: The Minister of Finance is always
consistent in the approach that he takes with such reports.
Senator Bolduc: That is too light an answer for me.
The Hon. the Speaker: Senator Bolduc -
Senator Bolduc: This is a matter of principle.
The Hon. the Speaker: Senator Bolduc, I must operate under
the rules that the Senate gives me. The understanding was that
there would be two senators with one question each, and no
I will certainly be prepared to recognize the senators who had
questions today, but did not get an opportunity to ask them, next
time we meet.
Resuming debate on the motion of the Honourable
Senator Moore, seconded by the Honourable Senator Lucier,
for the second reading of Bill C-51, to amend the Criminal
Code, the Controlled Drugs and Substances Act and the
Corrections and Conditional Release Act.
Hon. Ron Ghitter: Honourable senators, I rise today to speak
to second reading of this omnibus bill. This bill includes some
important amendments to three pieces of legislation. As is
properly the case with omnibus legislation of this nature, there is
little in this legislation that is of a controversial nature. The
amendments have the support of the legal, political and
enforcement communities. Only the Reform Party seems to find
the amendments unacceptable in that, in their view, the
legislation should have brought forward stricter sanctions in the
The substance of the bill has been well expressed and analysed
by Senator Moore in his contribution to the debate on
November 24. The bill introduces amendments to 12 different
areas of the law, the most significant being as follows: With
respect to the law of homicide and criminal negligence, the bill
removes the time-honoured provisions of the Criminal Code that
disallows the prosecution of an individual for murder,
manslaughter and other offences after more than a year has
passed since the death of the victim, regardless of how clearly it
is proven that the accused caused the victim's death.
The rationale behind the legislation is appropriate in that, with
the scientific advances of this modern era, an individual injured
as a result of a crime could live well beyond the year and a day,
even though their eventual death could be proven to be
attributable to the criminal act.
It would be interesting to know how many of such cases have
resulted in an accused avoiding prosecution. I doubt that there
are many, but perhaps the committee studying the bill can make
such inquiries. In any case, the amendment makes sense, and I
Other amendments include the modernization of the fraud and
theft provisions in respect of valuable minerals; the provision of
rules governing how the time on a conditional sentence runs
following the breach of a condition; widening the scope of the
offence of obtaining the services of a prostitute under 18 years of
age, and ensuring that only officials with law enforcement duties
can execute search warrants, are also aspects of the bill.
In the gaming area, there are two interesting amendments, one
of which deserves some particular attention. The first permits the
operation of casinos on international cruises that are Canadian, or
in Canadian waters. This amendment affects only those who are
able to utilize these expensive and luxurious cruise ships.
Therefore, I have little concern should their customers be parted
from their disposable incomes at the gaming tables on the cruise
However, I have some concern over the provisions that permit
dice games to be conducted in casinos under provincial
guidelines. I happen to know a little about dice - less elegantly
known as "craps" and immortalized in the world's largest
floating crap game in Guys and Dolls. Craps is a fast game.
Money can be won and lost very rapidly and, as I know, mostly
lost. The game requires an element of skill and knowledge, and
most players have neither.
I do not intend to advance the moral argument on the evils of
gambling. We just went through this excruciating debate in
Alberta last October when Albertans generally chose to keep
VLTs, which followed months of petitions, arguments and
soul-searching. However, there are certain indisputable truths
with respect to this issue. Governments are just as addicted to
gambling as are those who frequent our casinos to play
blackjack, or our restaurants and bars to play the VLTs. The
governments get richer - in Alberta, to the tune of $700 to
$800 million a year from VLTs alone, and over $2 billion a year
from all forms of gaming.
While the poor get poorer and their families suffer, ultimately
the money received by governments goes from one pocket to the
other, in an attempt to assist those who are on social assistance
due to their gaming losses. I must say that I am basically of the
philosophy that individual responsibility must always prevail,
and that it is not for the government to guide its policies on the
basis of the minority who are unable to show responsibility in
their lives. Once governments get into the area of telling
individuals what is best for them, and assuming the
responsibilities that should be assumed by the individual, we are
in trouble, for where does it stop, and who is to say that the
government knows best?
There is an argument that the more we allow the expansion of
gambling opportunities, the more we allow for the enticement of
weaker individuals into the follies of hoping for the big score
against all odds, and in playing dice I can assure you that the
odds are very much in favour of the house. The minister, in
introducing this legislation, suggested the following:
I want to assure the house that changes are not intended
to increase the level of gambling activity in Canada, nor do
we expect them to have this effect.
With the greatest of respect to the honourable minister, may I
suggest that not only will there be an increase in the level of
gambling activity in Canada as the result of allowing dice into
the casinos, there will be an increase in the losses of those
visitors who come into our casinos. To suggest otherwise
indicates a lack of understanding of the mystical qualities and the
lure of "dem bones" and the roll of the dice. The expression "roll
the dice" you may recall, in a political sense, which certainly
caused a furore in some circles in politics in Canada in the past.
I raise this issue because one could ask where do we stop, if at
all? How far should governments go in allowing gambling in our
country? A difficult and important moral issue arises, to which
the committee charged with examining this bill should direct its
At this point in time, I have no further comments with respect
to this bill, pending the review of the transcripts of the committee
hearings, which I look forward to reading.
The Hon. the Speaker: If no other honourable senator wishes
to speak, I will proceed with the motion.
Hon. Céline Hervieux-Payette moved second reading of
Bill S-21, respecting the corruption of foreign public officials
and the implementation of the Convention on Combating Bribery
of Foreign Public Officials in International Business
Transactions, and to make related amendments to other Acts.
She said: Honourable senators, I am pleased to rise to speak on
a bill of such major importance for the conduct of international
Corruption is a threat to the rule of law, democracy and human
rights. It undermines the principle of good governance, threatens
the stability of democratic institutions and undermines the moral
foundations of society. Corruption is prejudicial to international
trade and free competition, and hampers economic development,
particularly in developing countries. Through its OECD partners,
Canada is working actively to encourage global systems for
ensuring security and the improvement of the human condition
and to strengthen trading ties, in order to help nations develop
and prosper. We are increasingly aware that the best way to
defend our national interests is to defend them within
international institutions and tribunals and to put in place rules
and institutions that will allow Canadians to obtain the kind of
protection they need.
Bribery of public officials is one of the major problems
encountered in international trade and investment. Within the
OECD, it is a very important issue for Canada and for other
international organizations. The OECD has 29 members,
including Canada, the United States, most of the European
countries, Japan and South Korea, and is the principal economic
policy tribunal for the most advanced industrialized democracies.
The convention binds each signatory to establish a criminal
offence of bribery of foreign public officials in international
transactions and to take the necessary action, in accordance with
its legal principles, to establish the responsibility of corporations
in the event of bribery of a foreign public official.
Each party, or country, must ensure that these penalties are
effective, appropriate and dissuasive, and that the bribery and the
proceeds of the bribery can be seized. The range of penalties
must be comparable to that for domestic bribery. The new
offence of bribery of foreign public officials is a crime carrying a
maximum jail sentence of five years. Section 67.5 of the Income
Tax Act has also been amended to add this new offence to the list
of Criminal Code offences to which this provision refers, thus
ensuring that bribes paid to foreign public officials are not tax
The convention also requires the parties to ensure that bribes
and the proceeds of bribing a foreign public official can be seized
and confiscated, and to consider imposing other civil or
administrative penalties. The new offence of bribery of foreign
public officials is an organized crime offence authorizing the
search, seizure and detention of criminal proceeds and is also
considered a major offence in a charge of laundering criminal
The convention also contains provisions dealing with
enforcement, legal assistance and extradition, which Canada
already meets. Where their judicial system allows it, each party
is required to provide assistance with criminal and civil matters.
During the negotiations, Canada said it could provide assistance
to other states in criminal matters but not in civil ones.
At the G-8 Summit in Birmingham, Canada and the
other G-8 members undertook to make every effort to ratify the
OECD Convention by the end of 1998.
The Canadian business community considers the OECD
Convention to be one of the greatest achievements to date in the
international campaign to combat bribery. This convention is
regarded as an opportunity to create an environment in which
Canadian companies will be able to compete on the basis of
quality, price and service, as it will limit the capacity of foreign
competitors to use bribery to land contracts.
So far, Japan and Germany have tabled their instruments of
ratification with the Secretary-General of the OECD. Also, the
United States and the United Kingdom have completed their
domestic procedures and should table their instruments in the
Five of the OECD's ten largest countries must ratify the
Convention by the end of 1998 for it to come into force. We hope
that Canada, as a leader in the fight against corruption, will be
the fifth country to ratify the convention.
Hon. John Lynch-Staunton (Leader of the Opposition):
Honourable senators, we on this side have no problems with the
bill. As a matter of fact, on the Order Paper on November 18, I
put down a question asking if the Canadian government would
introduce the appropriate enabling legislation. While the question
itself has not been answered, I am more than satisfied with the
fact that the bill was given first reading this week.
We understand that the government wishes to fast-track this
bill and that the Minister of Foreign Affairs will be here later, as
will other witnesses. We support that procedure in this case,
although I want to emphasize that the fast-tracking of a bill is
something we would ordinarily refuse unless it is emergency
legislation, such as the settling of labour strife. The post office
issue was the last bill we dealt with in that way. Under
exceptional circumstances, we certainly support fast-tracking
what is identified as emergency legislation. This bill, however,
does not fall into that category, except that, as Senator
Hervieux-Payette has pointed out, if at least five signatories to
the convention, representing at least 60 per cent of the trade
between 27 OECD members, do not pass the enabling legislation
by the end of this year, the convention will suffer a major
Honourable senators, it is too bad the proposed legislation did
not come to us earlier so we could have had more time to spend
on it. Perhaps the minister will explain the delay in its
introduction in the Senate.
The point is that this bill is now before us. In principle, we
believe it will be good legislation. We certainly support the
convention which has resulted in Bill S-21, but we do have some
questions for the minister.
I am delighted that representatives from Transparency
International Canada will be here. Transparency International is a
non-governmental organization, formed only a few years ago,
with chapters all over the world. This organization has done
extraordinary work in the field of international bribery. I think
colleagues will be very impressed with their presentation, and I
look forward to moving to Committee of the Whole to continue
Hon. Marcel Prud'homme: Honourable senators, I must say
that, at the beginning of the week, people were kind enough to
inform me of this bill, for which the approval of the Senate is
required rather urgently. I must say that I share the opinion of
Senator Lynch-Staunton. The nice thing about the Senate is, I
hope, that there are still senators who listen to what others have
I listened carefully to the comments of Senator
Hervieux-Payette and Senator Lynch-Staunton. I myself wonder.
Why adopt bills so quickly? I went through this unfortunate
experience in the other place, where we sometimes may not have
had the wisdom to take the time necessary to look at all the
implications of certain bills.
The signatures of certain countries at the bottom of that new
treaty made me suspicious. In my 35 years as a parliamentarian,
I have travelled to many countries to try to understand what was
going on, and I hope to have contributed to Canada's good
reputation. What I did see was, of course, very unpleasant.
Today, when I see countries anxious to sign treaties,
enthusiastically and with honour, to use an old expression, I tell
myself that perhaps we should be a little more careful about what
we are asked to do in a hurry. I am pleased to hear that the
Minister of Foreign Affairs can come to this chamber. This will
give us an opportunity to listen to him and to those who
absolutely want us to pass this bill quickly. However, what
Senator Lynch-Staunton said really caught my attention.
I have had bad experiences in the House of Commons with
fast-track bills. I promised myself not to rush into fast-tracking a
bill through first, second and third reading. I always regretted not
saying "no" to the fast-track procedure so that members would
have had time to reflect, for at least a day or a weekend, on
Honourable senators, this is a very difficult bill to speak
against. It represents virtue and honesty. However, we live on
planet Earth. Those of us with international experience have
every reason to be careful before entering into a new treaty.
Having said that, I believe I have put my views as clearly as I
Honourable senators, I understand the minister will be
appearing in Committee of the Whole this afternoon. We will see
what he has to say to those senators who have some concern.
The Hon. the Speaker: Honourable senators, if no other
honourable senator wishes to speak, it was moved by the
Honourable Senator Hervieux-Payette, seconded by the
Honourable Senator Gill, that this bill be read the second time.
Is it your pleasure, honourable senators, to adopt the motion?
The Hon. the Speaker informed the Senate that the following
communication had been received:
December 3, 1998
I have the honour to inform you that the Honourable
Charles Gonthier, Puisne Judge of the Supreme Court of
Canada, in his capacity as Deputy Governor General, will
proceed to the Senate Chamber today, the 3rd day of
December, 1998, at 5:45 p.m., for the purpose of giving
Royal Assent to certain bills.
Judith A. LaRocque Secretary to the Governor General
The Senate was accordingly adjourned during pleasure and put
into a Committee of the Whole on the bill, the Honourable
Eymard G. Corbin in the Chair.
The Chairman: Honourable senators, the Senate is now in
Committee of the Whole on Bill S-21, respecting the corruption
of foreign public officials and the implementation of the
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, and to make related
amendments to other acts.
Shall the title be postponed?
Hon. Senators: Agreed.
Senator Carstairs: Honourable senators, I would ask that the
Honourable Lloyd Axworthy, Minister of Foreign Affairs, be
invited to participate in the deliberations of the Committee of the
The Chairman: Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: While waiting for the minister to arrive, I
would draw to the attention of honourable senators the rules
which apply to Committee of the Whole. Rule 84 deals with such
matters as being required to speak from your seats, that there is a
10-minute time limit but that it is permissible to intervene any
number of times, and so on.
Pursuant to rule 21, of the Rules of the Senate, the Honourable
Lloyd Axworthy, P.C. M.P., Minister of Foreign Affairs, was
escorted to a seat in the Senate Chamber.
Senator Carstairs: I am pleased to introduce the Honourable
Mr. Lloyd Axworthy, Minister of Foreign Affairs. He is
accompanied by Department of Foreign Affairs officials:
Mr. Alan H. Kessel, Director, United Nations Criminal and
Treaty Law Division, and Mr. Keith Morrill, Deputy Director,
United Nations Criminal and Treaty Law Division.
The Chairman: Mr. Minister, welcome to the Senate. Do you
have a statement at this time?
The Honourable Lloyd Axworthy, P.C., M.P., Minister of
Foreign Affairs: Honourable senators, thank you for the
opportunity to appear before your committee and to address
Bill S-21 dealing with the bribery and corruption of foreign
officials in international business transactions. This is a very
important piece of legislation. I appreciate the fact that the
Senate is now in deliberation on this matter.
Senator Hervieux-Payette, in presenting this bill, made a very
important point. She said that corruption distorts all aspects of
international trade, competition, economic development and
investment. In fact, it has a corrosive effect on the fundamentals
of the rule of law, democracy and human rights.
I would compliment the Standing Senate Committee on
Foreign Affairs for its recent report on Asia which I had the
opportunity to read last evening. It makes a very important
connection between an effective business climate and an
effective global system which has the responsibility to live up to
the rule of law and to adhere to basic principles.
It has certainly been my experience in negotiating and working
on a number of these matters that one of the most insidious
influences that we now face internationally is the incidence and
frequency of corruption in a wide variety of countries. It
undermines not only what we do as Canadians in our relations,
but it has also had quite a dramatic and horrific effect on a
number of countries.
By taking the position represented in this legislation, by setting
certain standards and following up with efforts to provide a much
stronger international code, we believe countries will,
themselves, incorporate a broader set of standards and
behaviours which will improve the general business climate
internationally. We believe this effort will also impact upon the
capacity of countries themselves to develop a regime which
recognizes that good government, clean and honest government,
is the most effective form of promotion for economic
development, economic growth, and maintaining good
In this sense, we are exporting not only our goods and services
but certainly our values. We have learned the hard way that
integrity and probity in one's behaviour result in all kinds of
benefits and proper conduct. That, in itself, will result in a much
better climate of relationships for all of us.
In developing our partnerships, it is important that we tackle
these problems. As senators know, this has been a major focus of
work in the OECD. It has commanded the attention of OECD
ministers. Agreements were made just in 1997 to proceed
The OECD draft was put together last spring. Since then, we
have worked actively in consultation with the provinces and with
the business community in Canada to see how it can be
implemented. The legislation that is before you today is a result
I should also like to mention that the Organization of
American States has also adopted a convention on corruption
which follows many of the same principles, as has the Council of
Europe. What you can see is a broadening network of
commitment and engagement of a number of countries in
establishing these kinds of standards.
This legislation will allow Canada to honour the commitments
that we have made at the OECD, as well as commitments made
by the Prime Minister at the Denver Summit of the G-8 and the
United Nations. I strongly believe that it will also respond to the
needs of Canadian business. Most honourable senators have
probably received correspondence or know that the business
community, in particular the international business community of
Canada, has been a strong advocate of this legislation. You will
be hearing later from the transparency group who will make the
point for you. To their credit, they believe that doing clean
business is good business. They have been a strong promoter of
We are in a very key position at this time. Under the OECD
rules, five countries are needed to ratify it in order for it to
become law. Canada is the fifth country to provide the
ratification. If we can do this expeditiously, we will be able to
claim that we are providing the key which will unlock the door to
making this happen.
The essence of the convention is the requirement that each
state which is party to it will criminalize the bribery of foreign
officials, and take measures to establish the liability of legal
persons, which also includes corporations, for the bribery of
foreign public officials. If you look at clause 3 of the bill, you
will know that this is the centrepiece of the proposed legislation
The provision prohibits the bribery of a foreign public official
in the course of business. It would be punishable on indictment
and carries a maximum penalty of five years in prison.
The bill describes facilitation payments that would be exempt
from the ambit of the offence. Facilitation payments are the
normal course of licensing fees and permits which one uses in
terms of international trade discourse, for example, cargo fees.
As well, it would not be an offence if the advantage were lawful
in the foreign public official's country or public international
organization. Countries have their own laws which we must
recognize and by which we must play.
Reasonable expenses incurred in good faith and directly
related to the promotion, demonstration or explanation of
products and services, or to the execution or performance of a
contract, could also be argued as a defence under the act.
Honourable senators have also heard reference to the fact that
bribes paid to foreign public officials under this legislation would
not be deductible under the Income Tax Act.
The bill further proposes to create two additional criminal
offences, namely, the offence of possession of property or
proceeds obtained from bribery of foreign public officials; and
the offence of laundering the property or proceeds.
In closing, it is useful to quote Donald Johnston, a former
minister of justice who is now the Secretary General of the
OECD. In a recent article he was quoted as having said that
integrity in commercial transactions is essential in making the
global marketplace work and to assure that the public supports it.
He said that the logical consequence of globalization is that
honesty has to be enforced at the global, not just the national,
With the passage of this legislation, Canada has the
opportunity to ratify the OECD convention and to bring it into
force, thus ushering in a new era of international accountability.
Mr. Chairman, I believe that explains the basic intent of the
legislation. I would be happy to answer any questions that
members of the committee may have.
The Chairman: Honourable senators, shall clause 1, the short
title, be postponed?
Hon. Senators: Agreed.
Senator Lynch-Staunton: Thank you, minister, for your
presentation. We certainly support the bill. We do have some
questions, however, because we have not had much of a chance
to study it. It is unfortunate that it comes at such a late stage and
has to be fast-tracked in order to meet the December 31 deadline.
If that were not the case, I do not think we would be as
cooperative. Having said that, it is a significant piece of
legislation, as well as a rather unusual one.
Three ministers were involved in the press release announcing
the bill. What minister will be responsible for the application of
this bill? Under whose jurisdiction does it fall?
Mr. Axworthy: Mr. Chairman, I am cosponsoring this
measure with the Minister of Justice. Clearly, the enforcement
provisions are up to the Attorney General of Canada and the
attorneys general of the provinces. On the enforcement side, it is
clearly the Minister of Justice who will be taking the lead.
As Minister of Foreign Affairs, it is my responsibility to get
through legislation which has treaty implications for Canada,
which is why I have been taking the lead with regard to the bill.
Under the legislation are certain income tax requirements that
will also apply.
I take on the general wholesaling of the bill while other
ministers take on specific responsibilities with respect to it. The
great joy of being the Minister of Foreign Affairs is that once you
get this stuff through you can go on with something else.
Senator Lynch-Staunton: If I were a member of the House of
Commons, to whom would I direct questions as to how this bill,
once it becomes law, is being applied? Who would answer for it?
The one thing that is missing in this bill, and I hope you will
accept an amendment to include it, is a provision for reporting to
Parliament on the monitoring of this bill, so that Parliament will
know exactly how it is being applied, if it needs to be applied.
Perhaps the cases of bribery by Canadians are such that we have
a pretty good record. On the other hand, if there are those who
are being caught and prosecuted, it would be revealing to have a
regular report on the impact of this measure once it becomes law.
Mr. Axworthy: Senator, because I am responsible for
reporting to the OECD on the implementation of the convention,
I would take on broad reporting responsibility. If you were in the
House of Commons, senator, or if in fact you were to direct
questions to the Leader of the Government in the Senate on this
matter, then most of your questions, thankfully, would be referred
to the Minister of Justice.
Senator Lynch-Staunton: Would you accept an amendment
or addition to the bill to include a requirement that there be a
report tabled in Parliament on a regular basis?
Mr. Axworthy: Yes.
Senator Lynch-Staunton: If we were to write one today,
would you accept it?
Mr. Axworthy: Yes.
Senator Lynch-Staunton: Thank you, minister. My other
questions are just for clarification. Are subsidiaries and parent
companies covered under clause 3(1) of the bill?
Mr. Axworthy: I think it would depend on whether the
subsidiary was doing business in Canada. It is much more
difficult to use the bill extraterritorially to indict a subsidiary of a
Canadian company that has its incorporation in some other
country. If there is any form of legal attachment in terms of
responsibilities of the head office of that subsidiary, then the
legislation would apply.
Senator Lynch-Staunton: The definition of business in the
bill states that it is limited to any kind of business carried out in
Canada or elsewhere for profit. Why would non-profit businesses
not also be included?
Mr. Axworthy: In this case, the purpose behind the OECD
discussions was to deal specifically with business transactions in
this area. As a result, we are following the code set out by the
OECD. I can find the reference on that. In fact, the convention
itself reads "on combating bribery of foreign public officials in
international business transactions."
Senator Lynch-Staunton: There is nothing to stop a company
from setting up a charitable foundation and funnelling bribes
through that foundation, which is legally set up on a non-profit
basis, is that correct? There is nothing to stop anyone from
finding loopholes in this law, but if you included the word
"non-profit" that would put such corporations on alert, too.
Mr. Axworthy: I am not a lawyer. As a result, I pray a lot. If
some business was attempting to engage in a conspiracy to
defraud by way of front companies or other kinds of surrogate
organizations, the skill of the RCMP and our justice officials
would hunt them down.
Senator Lynch-Staunton: That was spoken like a true
minister of justice. I will draft an amendment and let my
colleagues proceed with their questions.
Senator Atkins: I am curious as to whether a bid for the IOC
- that is, the International Olympic Committee - although it is
not under the definition of "business," would apply to this law.
Mr. Axworthy: I always thought that involved sport, not
business. In today's world, who knows. That is my answer. I am
sorry, senator. I do not think it would apply in this case.
Senator Tkachuk: I have a question that is directly related to
Senator Lynch-Staunton's question. I am not sure whether it was
accepted that there would be an amendment on the question of
Mr. Axworthy: No, it would be on reporting.
Senator Atkins: I am not a lawyer either, minister, so I have
the same problem. My understanding is that there are non-profit
organizations that are charitable - that is, they are recognized
by Revenue Canada as being allowed to collect money and issue
receipts for income tax deductions - and then there are
non-profit organizations that are not charitable. For example, the
Olympic corporation is probably a non-profit organization, and
many sports organizations are run as non-profit organizations. In
other words, as a non-profit organization you can carry on
business anywhere you want like any other corporation.
Internationally, I am sure there are many non-profit organizations
that are doing business, including some that are charitable and
some that are not. Will those be covered?
Mr. Axworthy: Perhaps I can go back to the bill itself. In the
definition, article 2 states that "business means any business,
profession, trade, calling, manufacture or undertaking of any
kind carried on in Canada or elsewhere for profit." That is the
definition contained in the bill and that fits the OECD
convention, which was to deal with business transactions.
I have no doubt there may be other transgressions of the kind
you describe. They are presently not addressed in this bill. The
main concern for us was to deal with the growing incidence of
corruption and how it impeded business. From the discussions
we have had with the business community in Canada, it was their
concern as well that we tackle that specific problem in this
That is why questions about non-profit organizations were not
included. There would only be an attachment if there were an
attempt to use a non-profit organization as a front or to commit
conspiracy against the act. It would then be part of the
investigation that the police and justice officials would
Senator Tkachuk: Does the bill focus on the question of
whether the transaction itself was carried on by a for-profit
company or not-for-profit company, or whether the transaction
was carried on for the purposes of creating a profit? Which one is
Mr. Axworthy: In clause 2, it is carried on in Canada for
profit. That is the definition contained in the legislation.
Senator Tkachuk: It does not matter what the vehicle is,
then? That is to say, it could be a person or a non-profit
Mr. Axworthy: If they are in the business of making a profit,
they would be covered.
Senator Austin: Minister, for whatever value my opinion has,
I think you gave the right answer, namely, that you look at the
facts to see whether the transaction is in the nature of a for-profit
transaction. I am a lawyer, but my advice is free.
Mr. Axworthy: That is a first!
Senator Austin: With regard to questions looking for
exclusionary practices, two questions have been asked already,
namely, the question of "non-profit" and the question of
"subsidiary." The third question is whether the person alleged to
have committed an offence would not have committed that
offence if the transaction were with a member of a political party.
In the original material issued by the OECD and commentaries
related to those documents, it was intended in the agreement to
exclude transactions with "political officials," meaning members
of a political party, not in the legislative, administrative or
judicial roles. If the answer to that question is that they are
excluded, would it not be easy for those countries who wished to
turn their backs on this type of legislation to appoint recipients as
Mr. Axworthy: I refer you to the definition found in clause 2
of the bill, where it says "a person who holds a legislative,
administrative or judicial position of a foreign state," meaning a
"member of Parliament, including the upper chamber, an official
within government or a judge." That is the definition that we
have. If one were to use it as a party position - and there are
some countries in which the party sometimes holds precedence
over officials positions - that would have to be tested in the law
itself. The intent is there, but I would rely, again, upon the
reading of the law in terms of the attorneys general to determine
whether there was an effort to get around the law. We would then
be able to see it by whatever precedent applies.
Mr. Kessel has provided more elaboration. It also includes any
definition of "foreign public official." It says, "any person
exercising a public function for a foreign country." If someone
was "Secretary General of the Vegetarian Party," and that party
was in government at the time, but exercising a public function,
they would be caught under the act. That is contained in the
clause of the convention of the OECD.
Senator Austin: Could we have a definition of "person"?
There is a reference in the definition clause, clause 2, to section 2
of the Criminal Code. Earlier, I asked for a copy of the Criminal
Code, which has just arrived as we speak. We are talking about
juridical persons as well as living persons.
Mr. Axworthy: Yes.
Senator Austin: In asking these questions, I recognize how
important this advance is in terms of international commercial
practice and how imperfect international negotiations can be.
However, what was agreed to in November of 1997 is
certainly an advance, and I welcome the legislation.
Senator Kinsella: Minister, you mentioned in your
presentation that there had been discussion with the provinces.
Could you elaborate on that, and how it relates to the ratification
process of the convention?
Mr. Axworthy: We thought it was important to consult with
the provinces, but this legislation is federal legislation. We
worked with them on the basis that the provincial attorneys
general would also be part of the enforcement agency under the
bill. The bill is a stand-alone bill, but provincial attorneys general
would also be agents of the law in this case.
Senator Kinsella: Article 8 of the convention deals with the
matter of accounting. Section 1, in part, says:
...each Party shall take measures as may be necessary,
within the framework of its laws and regulations regarding
the maintenance of books and records, financial statement
disclosures, and accounting and auditing standards...
Those seem to be items that fall under provincial jurisdiction.
Whilst the provincial attorneys general might have given an
indication of agreement to the Criminal Code kind of
amendments, there seems to be an obligation for accounting
practices to be assumed under provincial jurisdiction.
Therefore, are you telling us that it is not necessary to have
more formal concurrence from the provinces for the ratification
of this convention?
Mr. Axworthy: In fact, the federal Criminal Code already
includes a number of offences which work on the generally
accepted accounting principles. Section 397, 361, 362, 400, 366,
388, all require measures similar to those contained in this
proposed legislation. Therefore, it is already part of the federal
Senator Kinsella: Notwithstanding that, have there been
discussions with the provinces?
Mr. Axworthy: Yes.
Senator Kinsella: Was the result of that discussion that the
provinces are in agreement that this is a good move?
Mr. Axworthy: Yes.
Senator Kinsella: We also see this as an important instrument
in the area of human rights and international business.
Let me turn to a couple of specific items. In the convention, in
Article 1, section 4, they define "foreign public official." In
clause 2 of the bill, the bill defines "foreign public official." The
definition in the bill seems to drop the words "whether appointed
or elected" from the definition, which is what is included in the
definition that is in the convention. I am curious as to why the
words, "whether appointed or elected," were dropped.
Mr. Axworthy: I have just been informed that the reason for
that is we are using the definition which is contained in the
Criminal Code in order to be consistent.
Senator Kinsella: Was there an analysis that this does not
make a difference, or if it made a difference, what was that
Mr. Axworthy: The case law in Canada said that "elected"
covers all kind of positions including those appointed. We are all
held under scrutiny.
Senator Kinsella: Would the definition in clause 2 cover the
situation of a bribe being given to someone in contemplation of
that person becoming an official? In other words, the bribe being
made before the person becomes an official?
Mr. Axworthy: You are questioning me on a point of law. My
response would be that if it were proven that that person then
became a public official under the definition of the bill, than an
offence under the bill could have been committed. Therefore, if
one were hoping that the person would become the minister of
the ministry responsible for customs and the person ended up
being the minister of foreign affairs, one might have made a bad
Senator Andreychuk: Minister, the OECD had unwritten
rules some time ago. Am I correct that this legislation will only
cover bribes directly or indirectly to the official, and that he or
she must gain from it?
From my small venture into that unique and unusual world of
international diplomacy, my concern is that the money is rarely
paid these days directly to the official, nor does he gain from it.
However, surprise, surprise, someone very near and dear to him
is profiting from it. There is no direct conversion, there is no
direct implication of the public official. One must simply go to
that country, live there for a while, and what was often said was
"You learn the culture." In other words, you knew where to place
the money. Am I correct in my quick reading of this proposed
legislation that none of that activity will be stopped by this
Mr. Axworthy: Actually, senator, the bill does cover any
offence that would be a bribe directly or indirectly, which would
include agents of a person and family members. It would cover
off the concern you raise.
Senator Andreychuk: Are you saying that if a public official
does not get involved in any way, nor are there any
conversations, but if some gift is given to a close friend of the
minister's or to his extended family, with no discussion as to why
that gift is given, then we would be in a position to take action?
In other words, are you saying that it is inference we are working
from, not direct evidence?
Mr. Axworthy: Senator, there would have to be some
evidentiary process. You would have to prove that the public
official gained some benefit along the way through this activity.
That brings us back to investigation. Again, the wording is
taken from the Criminal Code, so that the case law under that
statute would be applicable.
Senator Andreychuk: I am pleased to see that the legislation
is now dealing with those who are giving bribes. We have often
pointed and accused people for accepting them but we have
rarely commented on the fact that it was more from the
developed world that the bribes were coming. We are going in
the right direction.
I want to underscore that there is a growing sophistication on
how to move money and gain benefits. I am not sure that this
proposed legislation will trap it.
Do we feel that we have sufficient mechanisms in place to be
able to prosecute fully? Much of the evidence will be offshore,
and probably offshore from the country where the official is
located, or the third party, in perhaps a third country. Do we have
enabling legislation sufficient to address that situation today?
Mr. Axworthy: One of the corollary developments of the
convention has been quite active arrangements being made for
coordination of police activities and the sharing of information.
Clearly, even under the convention, there is a requirement for
mutual assistance in these matters. Signatories would then be in a
position where, if a case is considered on either side of the
exchange, the other country would be required to cooperate
actively with police forces in that investigation.
Senator Andreychuk: Will this legislation trap officials in the
World Bank and other institutions like that who control much of
the foreign activity?
Mr. Axworthy: Yes, it does include members of the
Senator Andreychuk: Finally, will you be considering
different instructions to foreign service officers? Presently, when
business goes out, the instruction to our foreign service is that
they are not to get involved in the contents and the negotiations
of contracts. However, they do hear a lot and know a lot. Will
they have increased responsibilities and obligations to bring
forward information for investigation, and has that been put in
any kind of policy guideline that we can see?
Mr. Axworthy: If there is any sense that a crime has been
committed, any Canadian public official is under an obligation to
report it. We will also be ensuring, through the cooperation of
many of the international business groups involved in the
consultation in this, that people doing business overseas will
know what their obligations will be under the act.
Senator Andreychuk: Will there be a separate set of
Mr. Axworthy: I am not sure it is necessary. When we set out
instructions to each head of mission, one of the requirements was
that they follow through on the laws of Canada.
Senator Joyal: I would like to continue on the last question of
Senator Andreychuk about the information to give or make
available to Canadian businesses regarding their activities
I remember a few years ago that the Auditor General of
Canada had noted in his report irregular payments made by
certain Crown agencies which I will not name. These agencies,
in their activities abroad, had remitted payments which,
according to the Auditor General, did not comply with Canadian
I think that if we are going to encourage the private sector to
comply with the objectives of the law - and I will repeat an
adage that my colleague Senator Beaudoin knows well - "the
wife of Caesar must be above all suspicion." And I think the first
to serve as an example of this are Canadian government agencies
involved in trading activities abroad.
Do you not consider it appropriate to inform Canadian
agencies involved in trading activities of the objectives of this
law so that no one may later plead ignorance of the initiative we
are pursuing today?
Mr. Axworthy: Senator, no doubt there will be
communication. Currently, we have quite a good Web site
connecting all our posts abroad, our officials, and all those in the
posts who represent different agencies, Crown corporations, and
others who work abroad. Once proposed legislation of this kind
receives Royal Assent, its purpose would certainly be posted on
that Web site, and we would undertake any other form of
dissemination that is required. This will be an important piece of
legislation. It will set a new standard, and we want to ensure that
people recognize that it will be setting a new international
standard for business transactions.
Senator Joyal: In the same context, Senator Lynch-Staunton
mentioned the Senate being given an opportunity to follow up on
how the act is being implemented.
We have had, in the last month, legislation sponsored by our
colleague Senator Corbin. The Senate had the opportunity to
debate and report on it. Bill C-3 is before the Standing Senate
Committee on Legal and Constitutional Affairs, and that is a bill
which contains similar provisions. We would invite you to
consider an initiative that would give the Senate the opportunity
to review the implementation of this legislation, especially
considering that we are breaking ground on this. We are not just
one of the 29 countries signing it; we are the fifth.
It is important that members of this house have an opportunity
to follow the implementation of this legislation. I would certainly
support such an initiative. It would, as you have said, echo the
objective of the report that the Honourable Senator Stewart
tabled yesterday in this house in order to ensure that all our
initiatives on the international front are coordinated and
measured by the same standards of ethics.
Mr. Axworthy: On that point, Senator Joyal, I have talked to
officials, as has Minister Marchi. We would like to respond to
that report. I consider it to be a very instrumental report. When
we are able to fully review it, we will report back to the chair of
the committee and to the committee itself our views and the
initiatives that it recommends. We will be responding to that
There are two levels of reporting. One is by the OECD itself,
and that is part of the convention. It would be done under its own
assessment and monitoring procedures. The other, as Senator
Lynch-Staunton has proposed could be done by Parliament. If
senators wanted to move an amendment that would require an
annual report to be tabled in both chambers, we would certainly
agree with that.
Senator Joyal: I should like to return to the question of
non-profit corporations that was raised by other colleagues.
The Criminal Code states that "person" is also defined in
section 33 of the Interpretation Act, and that it includes a
corporation. It was held in R. v.Township of Richmond that
"corporation" includes a municipal corporation which could
therefore be charged with an offence contrary to the Fisheries
Act, and so forth. A corporation, as we say in French, is a -
We are talking about a corporation. Whether this is a
profit-making or non-profit corporation, it exists and it is
Accordingly, I do not see how there can be support for a
narrow definition of the word "person" that excludes non-profit
Do have you an opinion indicating anything to the contrary?
Mr. Axworthy: Perhaps to provide further clarification on that
point, I might refer to, as you did, "person" as defined in
section 2 of the Criminal Code. It reads as follows:
"every one," "person," "owner," and similar expressions
include Her Majesty and public bodies, bodies corporate,
societies, companies and inhabitants of counties, parishes,
municipalities or other districts in relation to the acts and
things that they are capable of doing and owning
The key in this case is that if any of those named above is
engaged in a profit exercise, it would come under the convention.
Senator Joyal: I plead for a liberal interpretation of this
section, if you understand me, Mr. Minister.
Mr. Axworthy: I am always in favour of liberal
Senator Joyal: I should like to move on to subclause 3(3)
which reads, in part, as follows:
(3) No person is guilty of an offence under subsection (1) if
the loan, reward, advantage or benefit
(a) is permitted or required under the laws of the foreign
I am having some second thoughts about that proposed
provision because it seems to me that we may be creating a
double standard. On the one hand, there are certainly countries in
the world where the provisions of their Criminal Code are not as
stringent as ours and, on the other hand, in many regimes, what is
not prohibited is allowed. I am not sure if, with such open-ended
drafting, or loophole, we are not in fact supporting indirectly -
I do not mean at all that it is the objective of the bill - what we
want to prohibit in countries where the laws are not as
compelling as our own legislation. It seems to me that we should
follow the code of ethics we have in Canada when we are dealing
with other countries. I do not want to give any analogies, because
they may not apply perfectly, but there is no doubt that certain
acts that are prohibited in our Criminal Code could be allowed in
Are we creating a loophole?
Mr. Axworthy: To begin with, senator, all the parties to the
convention itself have laws against bribery, so it is not as if
someone has an open licence. The exact definitions and
interpretations are clearly subject to the national laws of those
countries. The convention itself is a negotiated one. It is one that
brings countries together to find what is a common norm which
we can accept.
If we were at all times to establish our standards, which are
sometimes different from and sometimes better than those of
other countries, then we would be putting ourselves in two types
of jeopardy. The first would be in attempting to apply an
extraterritorial application, and the second would arise by putting
an onus on our own businesses that no one else would adhere to
and which would therefore substantially disadvantage them.
However, let us take this for what it is. It is a major step, based
upon an agreement of other countries, to establish this as a norm.
It will take some while to see how it works. There are reporting
or monitoring mechanisms to determine that.
One reason we want a stand-alone act is so that we can adapt it
over time without having to make repeated Criminal Code
amendments. Therefore, we will learn from it. If we were now to
say that we will take the quintessential performances that we
expect at the highest level in Canada and assume they will
happen in some other country automatically, I think we would be,
as I say, putting ourselves in some jeopardy, first, by applying
our own standards to an international treaty, and second, by
putting our own business community at a disadvantage as
Senator Joyal: Clause 6 of the bill reads as follows:
A peace officer or a person acting under the direction of a
peace officer is not guilty of an offence under section 4 or 5
if the peace officer or person does any thing mentioned in
either of those sections for the purposes of an investigation
or otherwise in the execution of the peace officer's duties.
My first reaction to that was to recall the McDonald
commission. Are we not giving peace officers our blessing to
break the law when they are conducting investigations? Were
there not some commissions that made very stringent
recommendations to Parliament regarding how peace officers
must abide by the legislation when they conduct their
Mr. Axworthy: Senator, this is designed primarily to protect
police officers doing investigations. If they seize proceeds from
an illegal act, an act of bribery, they have to be given exemption,
otherwise they would be liable under the act. We would have
great difficulty with enforcement if we started indicting police
officers for carrying out their duty of dealing with whatever
exchange had taken place under a bribery charge. This is simply
to ensure there is a clear sense of accountability for those who
are engaged in the act. It does not drag police officers themselves
into criminal conduct.
Senator Stewart: We all know that Canada is highly
dependent on trade in goods and services. Presumably, one of the
chief purposes of bribery, as dealt with in this bill, would be the
facilitation of the business activities of the persons mentioned in
the definition. That leads me to two related questions, both
anticipated, to some extent, by Senator Joyal.
Are we convinced of the capacity of the governments which
have signed the convention to perform? Taking the area of
human rights, for example, conventions have been signed and,
lo and behold, the government of the day in the signatory state
finds that it is just not strong enough to carry through on its
commitment. Therefore, we may be insisting upon a high
standard of performance by our Canadian business persons and
then finding that that high standard is not being lived up to by
business persons of other countries, all to our disadvantage in
terms of trade in goods and services.
I suspect that it will require almost the rhetorical ability of the
Governor of the Bank of Canada to deal with my first question.
Are you satisfied that the signatories are able to deliver on the
terms of the convention?
Mr. Axworthy: First, Senator Stewart, we always have to
work on a basic belief that a government that commits itself to
ratify a treaty is prepared to implement its standards. No one is
perfect, as we all know. In the human rights field, we know
countries are far from perfect. Nevertheless, states are ratifying
on the basis of commitments.
In this particular case, we are dealing with 14 states in the
OECD, all of which are well-developed, active countries with
good governance and very strong laws. They are also our major
trading partners, so there is no disadvantage to Canadian
companies per se because most of the countries in the OECD are
the ones our own businesses are dealing with, and we expect the
same high level of enforcement we get in the area of our own
Will it be perfect? We do not know, but, as I said earlier, we
will monitor it, and correct it, but it is important to take the first
step. My own experience with other treaties has been that they
also set standards for countries other than the signatory countries
themselves. They begin to raise the bar of behaviour
internationally in a much wider swath, a much wider network,
and that is why we believe the pursuit of this convention, similar
to what we will be pursuing through the OAS on other matters,
substantially extends that standard on a more global basis. Can I
guarantee absolute adherence? No, but I can certainly guarantee
the situation will be much better than it is now.
Senator Stewart: I thank you for that response. I have a very
easy question now. You say there are 14 countries which are
Mr. Axworthy: It is actually 29. I misspoke.
Senator Stewart: Which four of that 29 have already put
themselves, in terms of ratification and legislation, in a position
Mr. Axworthy: Right now it would be the United States, the
U.K., Japan and Germany. We would be the fifth.
Senator Prud'homme: This bill originated in the Senate,
which is a rare occurrence. This is an excellent precedent. The
fact that we are presently sitting in Committee of the Whole tells
me that you want the bill passed as quickly as possible. I would
have expected this bill to be referred instead to the Committee on
Legal and Constitutional Affairs chaired by Senator Milne. This
is a very important bill with international ramifications.
When I look at the list of the countries that were the first to
sign this treaty, my suspicions only get stronger. I am a little
concerned about their haste to sign it.
Looking at who has yet to sign, I ask myself why Canada
should be the fifth signatory.
Do you have any assurances that a Senate bill can be passed
quickly by the other place? Have discussions taken place with
the various political parties, seeing that we are expected to pass
this bill today? I am not sure I can support this bill at third
I am not sure I will give third reading today, but we will see.
What assurances do you have that the House of Commons,
which, based on my information, should adjourn next Thursday,
will quickly pass such an important bill originating from the
Senate? We all know how virulent the Reform Party is and what
state of mind the Bloc Québécois is in these days: slightly
depressed following their defeat in the Quebec election last
Monday. Why not refer it to the Committee on Legal and
Mr. Axworthy: First, Senator Prud'homme, let me it make
clear that I make no distinction between the two chambers in
terms of introducing bills of this importance.
Senator Prud'homme: We are very happy.
Mr. Axworthy: In fact, I wish to express my appreciation to
the Senate for the way in which they dealt with the pre-clearance
transit bill, which is now going into second reading and receiving
the proper consideration. We have a number of initiatives in
international agreements and conventions that are coming and I
hope we can continue to work closely with this chamber in
introducing them and getting your cooperation.
As to this specific legislation, I cannot answer as to which
committee it will be referred to, that is up to the leadership of the
Senate. You run your own business. However, as far as the House
of Commons is concerned, we are at present in negotiation with
the various parties to determine if we can get consideration. It
depends in part on when it emerges from the Senate. If we can
have the bill so that the Commons can consider it next week then
I believe we will have it by the adjournment, but that is all
subject to negotiation.
Senator Prud'homme: If Canada is the fifth country to sign,
you will be very happy, but what should we expect from
countries that do not sign? Must they respect the treaty?
Mr. Axworthy: The 29 countries have all signed and now it is
a matter of ratification. The important point about the fifth
country is that it establishes the convention. As I indicated, the
United States, United Kingdom, Germany and Japan, which are,
if not the most significant economic powers in the world,
certainly our major trading partners and competitors, have
already signed on and that is the lead we want to deal with. I am
sure the others will come along. As we have found in other
treaties, if everyone waits for everyone else you never get
anywhere, and that is one reason we are asking for the Senate's
approval before the end of the year.
One reason that it is coming in at this time is that we wanted to
allow for careful consideration by the business community in
Canada, which we did undertake, and they, as well as the
provinces, have made several recommendations on the
legislation. I will point out that generally this process is very fast
track, not just for us but for everyone. This was only decided
approximately a year ago. In the realm of international treaty
making, this is a very quick response, which I believe indicates
the wide degree of support it has right now.
Senator Prud'homme: Over the years, and I think some of
my colleagues have touched on this subject, we have seen great
corruption coming from some Crown corporations. If someone
were to challenge me, I will give them the amount of money,
what it was for and who got the money.
What assurance do we have that this bill covers people who
are not officials and who are used as intermediaries at great cost
because they happen to know the right person in the right place?
I am thinking of an incident where $15 million was paid for the
sale of a CANDU reactor in a certain country. We know who got
the money. Will that be covered by this bill?
I have many examples, but they will disturb the Christmas
Mr. Axworthy: I have not noticed much Christmas
atmosphere from the place I occupy every day but I am glad it is
Two points have already been raised; one being that under the
definition the convention does cover Crown corporations. We are
talking about including Her Majesty and public bodies, corporate
societies, companies, inhabitants, et cetera, so they would all be
covered if there was a profit transaction.
Second, in response to Senator Andreychuk, I pointed out that
convention also covered indirect activities, which would include
agents, family and other persons who would be used in some way
to act as intermediaries. You must prove it and you must get the
police evidence; nevertheless, I believe they are covered under
Senator Lynch-Staunton: I have one question, and then I will
read what I hope will be an acceptable amendment, subject to the
legal experts refining the language if need be.
You mentioned earlier in your presentation that the OAS also
had a similar convention that we have yet to sign. Would this bill
cover the OAS requirements; in other words, any other
international organization which decides to try and implement
the same sort of limitations on bribery?
Mr. Axworthy: Senator, I believe that this bill will cover the
OAS convention. There may be some tinkering on the edges, but
they have very strong parallel convention articles in them. The
legislative changes we are making under this bill would allow us
to proceed with our obligations under the OAS as well.
Senator Lynch-Staunton: Honourable senators, my suggested
amendment is as follows: The minister of - fill in the blank, but
I imagine it will be the Minister of Justice - within four months
of the end of the previous fiscal year shall table in both Houses
of Parliament an annual report on all matters concerned with the
enforcement of this act.
Mr. Axworthy: Senator, I just asked the officials for a view on
that interpretation. It would depend, in part, on what you are
looking for. If you are looking for enforcement actions in
Canada, it would be the Minister of Justice. If you are looking for
reports on what is happening with other countries under the
conventions, it would be the Minister of Foreign Affairs. What I
recommend is that it say that the Government of Canada would
table a report, as opposed to a specific minister.
Senator Lynch-Staunton: We are looking for a regular report
on an annual basis as to how the act is being enforced, who has
been caught under it and whether it is effective. If there are
weaknesses, they should be pointed out to Parliament.
I now have what the law officers have suggested, and I will
read it again. Subject to your officials approving it, we could
raise it at third reading:
That Bill S-21 be amended on page 6(a) by adding the
following after line 35:
12. Within four months of the end of each fiscal year,
the Minister of Justice and Attorney General of Canada
shall prepare a report on the administration of this act,
and the minister shall cause a copy of the report to be
laid before each house of Parliament on any of the first
15 days on which that house is sitting after the report is
(b) by renumbering the clauses...
It is a question of who is responsible for tabling the report.
Mr. Axworthy: I would expect there to be a large catalogue of
prosecutions every year. In the United States, where they have
had similar legislation since 1997, there have been about 16. In
effect, it would be a short report.
Going back to what Senator Joyal said, if you wanted to
broaden that orbit slightly to include examination of what we
found under the convention in the OECD itself, that would be the
responsibility of the Department of Foreign Affairs and
International Trade. It is a shared responsibility in this case.
My point is that with respect to requiring the Minister of
Justice, all you would get are prosecutions in Canada. You would
not get the broader assessment that might be made in terms of
OECD activity. If I hear the intent of senators, you would like to
have that broader assessment.
Senator Lynch-Staunton: Correct.
Could we put in something to the effect "the Minister of
Foreign Affairs, the Minister of Justice and the Minister for
International Trade shall jointly..."?
Mr. Axworthy: Sure.
Senator Lynch-Staunton: Something like that.
Mr. Axworthy: Yes.
Senator Lynch-Staunton: Perhaps you should refine it, and
then we can raise it at third reading when we get there.
Mr. Axworthy: We will consult with the law officers of the
chamber and come up with some words for you by third reading.
Senator Lynch-Staunton: Could you do that before we
Mr. Axworthy: Yes. My distinguished colleagues can stay a
few minutes after I am through and do their refining legal work.
Senator Kinsella: Looking with great specificity at the matter
of the ratification of this convention, perhaps it would be good
for us to have on our record the process followed by Canada in
depositing the instrument of ratification. Am I correct in
understanding that you, as Minister of Foreign Affairs, will make
a recommendation to the Privy Council that a decision will be
taken and a minute recorded? That will constitute the
authorization for you, as Minister of Foreign Affairs, to deposit
that instrument of ratification with the depository.
Mr. Axworthy: There would have to be an Order in Council
authorizing me to proceed with the ratification.
Senator Kinsella: That is done pursuant to article 14 of the
convention. In my reading of this convention, that could be done
this afternoon, even though this particular bill has not passed
Parliament. Indeed, if they are a little slow in the other place, I
suggest that you consider doing that and depositing that
instrument of ratification on December 10, which is International
Human Rights Day.
I say that having read the substantive articles of the
convention. Is it not true that the convention is seeking to create
an obligation by using such words as, "Each Party shall take such
measures...."? In other words, it is the future tense.
We are obviously well along the way. Indeed, as you can see,
honourable senators are anxious to see this bill enacted. We
could ratify that convention without this bill having passed
Parliament. Am I incorrect in my reading of the convention, or
am I correct?
Mr. Axworthy: I think you are correct in terms of form.
However, having been around a long time, I have learned that it
is better to pay good attention to parliamentary procedures and
hold Parliament in full respect. Therefore, I would prefer to have
the legislation pass before I went for ratification.
Senator Kinsella: I think my technical questions have been
raised and answered by other senators. That is all I have.
Senator Eyton: Mr. Minister, for the record I wish to say that
this convention as conveyed in the bill before us is well
supported by business both in Canada and worldwide. It is not
perfect, and that is because it is the result of discussion,
compromise and consensus amongst thousands of individuals
and organizations. However, it is a great step forward.
I make these observations partly because I have been a
member for some years of the executive committee of the
International Chamber of Commerce based in Paris. This subject
has much engaged that organization for a very long time.
When the OECD became seized of the subject and was
proposing this action, the ICC struck a committee or commission
with specialists who became much engaged in the discussion I
mentioned earlier. Their product has the blessing of the ICC, and
that is not immaterial. The ICC has a worldwide membership
representing over 120 countries. The Canadian national
organization representing the ICC is the Canadian Council for
Taken together, all of this means that the convention and the
bill are strongly supported by world business represented by the
ICC, and here in Canada by the Canadian Council for
International Business and its related organization, the Canadian
Chamber of Commerce. As well, I should like to add my
personal support for the bill.
I am curious as to what the Canadian government may do,
what you may do beyond the OECD. It is obviously easier to
have this convention and the bill enforced amongst the current
signatories. What steps can the Canadian government take to
encourage more signatories and much broader enforcement?
Mr. Axworthy: Senator Eyton, I appreciate your overview of
the active work that has been done through the international
business organization. One essential part of this process is to
ensure that there is a concurrence of views. This convention is a
product of that work.
In terms of other activities, as I pointed out during my opening
remarks, we are also active in the OAS on pursuing a convention
there. This legislation will conform to that. The Council of
Europe is pursuing activities. The United Nations next year will
be dealing with a major convention on transnational crime.
Various protocols are being examined. Part of the discussion will
address how corruption is dealt with under those auspices.
Ultimately, the WTO will be looking at this as part of its
procedures as well.
This convention is a building block. Such a statement by the
29 OECD countries carries a lot of significance and weight and
will provide the launching pad for a much broader application of
Senator Grafstein: Mr. Minister, I want to follow up on the
question to which Senator Stewart and Senator Eyton have
alluded. You raised it in your last response to Senator Eyton, and
that is accession to the WTO. In the next few years - I am not
sure of the actual timing - some major economies will be
actively pursuing accession to the WTO.
Is there a common view or is it the view of the Government of
Canada that, as a precursor to membership - I do not want to
lay it down as a pre-condition - this treaty should be ratified,
particularly by the major players where Canada has a major
interest in pursuing its trade and investment proposals? I am
thinking particularly, without any criticism at all, of China. We
know China is actively engaged in seeking to join the WTO.
Mr. Axworthy: Senator, as you know, right now it is not a
pre-condition for membership, but there is no doubt that the
question of corruption is an active question in the WTO. It is a
matter of great concern. In evaluating and judging applications,
that is one of the tests which is increasingly being applied in
terms of accession.
Countries that are interested in becoming involved recognize
that they will have to begin changing standards. In some cases,
that is a very significant challenge, but it is one that is faced by
To get back to the point I raised with Senator Eyton, by
establishing a benchmark of 29 OECD countries - countries
recognized to be among the most developed and active
international traders - this convention provides a very strong
signal. Furthermore, we hope this convention will eventually
become more universal.
Meanwhile, as you know from your own experience, a country
need not be a signatory to a treaty to adhere to its standards.
However, a country operating outside of those standards will
become increasingly stigmatized. That is one of the results of
getting this convention on the law books.
Senator Joyal: What initiative are you contemplating to
ensure that a greater number of countries join the ratification
process, especially the major trading countries? All of us with
international experience know that a certain number of countries
in the world will play a key role as international models to ensure
that the objectives of this convention will be implemented.
To be more specific, what is your game plan to ensure that we
are not limited to five countries and that, in the reasonable future,
Canada's major trading partners will join the convention?
Mr. Axworthy: The four countries which have already ratified
and Canada together represent probably the top export countries
in the world. It is not just a matter of numbers. It is also a matter
of weight that they bring to bear on the matter.
As to the initiations, this was launched just in May of last year
at the OECD ministerial meetings. As I said earlier, we are
fast-tracking this convention, among a number of countries, until
the year 2000. We will be using every opportunity at the OECD
and at other ministerial bilaterals to move this ahead. At the
G-8 meetings, this is one of the topics to which we will be
committed. It is registered at the G-8 for the forthcoming
meetings in June 1999.
For us to carry some leverage, we must pass it. It is difficult
for us to urge on others if we are still in active debate. We want
to have this matter completed so that when we attend a number
of these active international meetings in the new year, we will
carry in Canada's endorsement.
Senator Joyal: I understand that the four countries which
have already signed are the U.S., Germany, Japan and the United
Kingdom. Would you agree to keep the ratification of that
convention as the top agenda item in your bilateral discussions
with the other trading partners when you travel around the world
or when the Canadian government is heading Team Canada
Mr. Axworthy: Yes, this is one of the items considered to be
of high priority by the Prime Minister, Minister Marchi and
myself. We will certainly be using every opportunity to
encourage other countries to sign on as quickly as they can once
we have ratification.
Senator Joyal: If that ratification happens to be completed
before the adjournment date of the other place, and in time for
the visit of the French Prime Minister in mid-December, can we
rely on to you raise that issue with the French Prime Minister?
Senator Prud'homme: I just wanted to make sure that the
reason for my hesitation was clear, Mr. Minister. I am not against
the bill; on the contrary. I was the one who suggested it to the
I am a member of the board of the Parliamentary Centre which
held a seminar on corruption and corrupt people. Basically,
everyone at that seminar shared the same views. I might just
mention that Mr. Stanfield is a member of the board, as is
Mr. Sharp. It is a very prominent board. I suggested that, if we
hold a seminar to discuss corrupt people, perhaps we should hold
one to discuss the corrupter.
It is all very fine and well to talk about corrupted people, but
we should also talk about those who do the corrupting. In many
countries, there would be no corrupted people without very
sophisticated people to corrupt them. I want to make it very clear
that I am not opposed to passing the bill, but I am being very
cautious in these matters.
The Chairman: Honourable senators, that completes my list.
If the minister wishes to make a final statement, I invite him to
do so at this time.
Mr. Axworthy: Mr. Chairman, I would like to thank the
senators for their consideration of this bill. I appreciate the
proposed amendment. I think it will strengthen the legislation. I
look forward to passage of the bill so that I can get on to making
similar interventions with my colleagues in the other place.
Senator Graham: Honourable senators, on behalf of all of
you, I wish to thank Minister Axworthy for his presence here and
for the very clear and concise manner in which he has responded
to all our questions and concerns. This is a very important piece
of legislation. As the minister mentioned, other legislation with
international ramifications is presently before the Senate.
In thanking the minister for coming today, we look forward to
welcoming him back on future occasions to further the
cooperation between the two Houses of Parliament. It is a very
important step and a very important process we are following
Senator Carstairs: Honourable senators, there is another
group of witnesses from Transparency International.
Is it the wish of honourable senators to hear from them this
The Chairman: Is it agreed, honourable senators?
Hon. Senators: Agreed.
Pursuant to Order adopted earlier this day, Mr. Wesley Cragg
and Mr. Michael Davies were escorted to seats in the Senate
Senator Carstairs: Honourable senators, from Transparency
International Canada, we have Mr. Wesley Cragg, who is the
Chairman and the President. With him is Mr. Michael Davies,
who is the Vice-President, General Counsel and Secretary.
I should say that in their other lives Mr. Davies is the
Vice-President, General Counsel and Secretary of General
Electric Canada; and Mr. Cragg is with the School of Business at
The Chairman: Welcome to the committee, gentlemen. I
invite either or both of you to make a statement, after which we
will proceed with questions.
Mr. Wesley Cragg, President, Transparency International
Canada: Mr. Chairman, I am very pleased to be here. This is a
very important occasion for Canada and for the international
I will make a few comments and Michael Davies will follow
with one or two of his own. We will then be happy to respond to
Transparency International supports very strongly this
legislation. For some time, we have been urging the government
to table anti-corruption legislation before the end of the current
year. Mr. Axworthy has already indicated that the convention
which Canada signed last December sets conditions that must be
met if the convention is to come into effect. If Canada does not
ratify the convention by the end of December, those conditions
simply will not be met.
We are in the rather remarkable position of being number five,
which is in some respects the most important position. Thus, in
my view, this will bring considerable honour to this chamber and
to the Parliament of Canada, as well as to Canada. If it is not
passed, in our view Canada will have lost an important
opportunity to provide leadership in an area in which it is widely
respected. That is one of our central concerns.
I want to talk a bit about corruption and why Transparency
International is concerned about it. It is important to begin with a
little history, which does not have to be lengthy. It is worth
noting that corruption has only recently appeared as an issue on
the public agenda. It is worth tracking a little bit why that is the
As recently as a few years ago, corruption simply was not a
word that was used in polite company, certainly not in public. No
one was doing it in international fora or in national fora.
The basic position of the World Bank and similar institutions,
like the International Monetary Fund, was that corruption was
essentially a cultural problem or political problem. It was usually
considered to be a problem for Third World countries, and ones
that they would have to deal with. The accompanying view was
that corruption did not cause any economic difficulties, certainly
not for the industrialized world. It was felt that if it had any effect
at all it operated as a kind of grease to move economic
machinery along when there were bureaucratic obstacles in its
Transparency International was formed five years ago in large
measure to change that perception. Those attitudes, in our view,
and in the view of the people who founded Transparency
International, were extremely damaging and very inaccurate. The
position of Transparency International is stated quite succinctly
by the first president and chairman of the Transparency
International Advisory Council, General Obasanjo, which is a
name which some of you, perhaps, will recognize.
He was quoted in the Financial Times in October of 1994 as
saying, "Let us strip away excuses and explanations. In no
society, north, south or east, is it acceptable to the people for
their leaders to feather their own nests at public expense. Once
this simple truth is widely accepted, more meaningful social and
economic development will follow."
General Obasanjo, as you will remember, was subsequently
escorted to jail in Nigeria where he spent a good period of time.
Canada played a significant role in the Commonwealth
advocating for serious change in Nigeria, as well as in his release
much more recently. He continues to be active in Transparency
International as the chairman of our advisory committee and
stands to us as a symbol of Third World views on the subject of
It is significant that the issue of corruption and its treatment in
the industrialized world is being watched very closely in the
developing world. I can tell you that there are people around the
world who are extremely interested in what this chamber will do
today and what the House of Commons will do, we hope, next
Transparency International is concerned about corruption. It
believes that no one wants it. It believes that it is a plague on
economic and social systems. It has been determined over the
past five years to make it a public issue and to bring it to the
attention of international institutions, as well as governments like
that of Canada, with a view to encouraging action to begin to
It is worth pointing out why we are concerned about
corruption. When Transparency International was formed, many
of the leaders came from the World Bank. Some retired early
from that institution in order to make corruption a public issue at
a time when the World Bank was not paying attention to it. They
were concerned for three reasons. First, particularly in
developing countries, corruption distorts public policy. It leads
governments to make decisions that are not in the public interest
but are, rather, in the interest of the people who will collect the
bribes when the policy is effected and purchases are made. We
now know that is the case. Research has established quite clearly
that it has this distorting effect.
One of the important effects is that it moves money from what
we call the soft side of the economy, that is, health, education
and social welfare, into projects such as highways and military
expenditures such as bridges, and so on. It is much easier to pass
bribes when you are dealing with those kinds of projects than
when you are dealing with things such as health or education.
This is one of the significant distorting impacts that exists for
That second impact, which is a significant one, and we often
lose track of it in our part of the world, is that it lowers the
quality of goods and services provided by the private sector in
the course of meeting their contracts. If you are offering
substantial bribes, the money must come from somewhere. It
certainly will not come out of profits. It comes either by
short-changing the countries with which you have a contract or
by undermining the quality of the goods and services that you are
offering in return for your contracts. This is an established fact
and has a significant impact on the quality of services that people
in developing countries receive from their tax dollars and also
from the international aid that their governments receive.
Finally, and extremely important, corruption undermines
government. It undermines the development of competent
political and democratic institutions. Where they are in the
course of development, it blocks that development. This problem
has been recognized by the Canadian International Development
Agency, to use one example. Good governance is one of the tools
that we are now promoting in Canada as a way to begin to deal
with the problem of corruption. The OECD convention is the
second most powerful tool in this respect.
Transparency International is an international anti-corruption
coalition that has chapters formed or forming in 70 countries
around the world. We are a genuinely international organization.
Our international secretariat focuses on marshalling public
opinion around the world against corruption, and we have been
effective in doing that. We work with international institutions
such as the World Bank, the IMF and the United Nations around
the world to develop anti-corruption programs. We also organize
missions to countries whose governments request assistance in
confronting domestic corruption. That is one of our tasks and one
of the ones that we perform most effectively.
Our organization builds chapters worldwide and we have
chapters in 70 countries around the world. We organize
international anti-corruption conventions whose purpose it is to
provide an opportunity for countries to come together and
discuss the problems that corruption causes.
The national chapters are semi-autonomous. We work under a
policy umbrella, but they take up the fight against corruption in
creative ways in their own countries. Frequently it requires
substantial courage and almost always it requires ingenuity.
There are some remarkable things that are being done by our
chapters, particularly in Third World countries. Nigeria is an
example. General Obasanjo stands as a symbol for what can be
done and the cost that some people must bear in the fight against
the scourge of corruption.
There are extremely interesting things happening in
Bangladesh, as in Chile and Argentina. I could go into some
detail on that if you are interested. It is quite clear that these
countries are putting corruption on the public agenda just as the
international agency is putting corruption on the agenda in
international institutions with organizations like the OECD.
Transparency International has played a significant role in
encouraging the creation of the OECD convention. It was one of
our objectives. We devoted enormous energy to it and we have
had a positive role in the emergence of that convention. The
convention was signed in December of last year, and it was an
event of real importance because it signalled, for the first time, a
collective resolve on the part of the industrialized world to
address the issue.
Earlier in the discussion with Minister Axworthy, someone
pointed to the fact that for a considerable period of time, and
until recently, corruption has been thought of as being a Third
World problem. Any time it was discussed in the industrialized
world, it was a finger-pointing exercise. This convention says to
the Third World, "We, too, have a responsibility. It is true that it
is your officials for the most part who are taking the bribes, but it
is equally true that our companies are offering the bribes. If our
companies were not offering the bribes, there would not be
bribes to be received." That is an extremely important issue for
Transparency International and for the credibility of the
international anti-corruption movement.
This convention is a powerful signal to the developing world
and will provide enormous symbolic support for people in the
Third World, who can now turn and say, "This is a partnership
and we are now able to work with the industrialized world to deal
with the problem of corruption." Our companies will be required
to respect our rules and, it is hoped, communicate these values as
they do business in the Third World.
With the convention, corruption will be recognized as a shared
responsibility. That is an important step.
I want to talk briefly about the convention and then the
legislation that you have before you. The convention is an
excellent one. It is a marvellous first step. However, it is only a
first step, as others have mentioned. Nevertheless, it is an
important first step. It covers direct and indirect bribery. It calls
for significant penalties for corporations and their agents. It is
important that corporations are covered; it is not altogether clear
in the legislation, but it is the case.
The convention also calls for careful international monitoring
of the implementation process. That is extremely important
because this is not a piece of legislation that will be passed and
then deposited. This is a piece of legislation that people around
the world will be looking at. They will want to know how
countries like Canada are implementing the legislation, how
effective they are in their efforts and they will be evaluating that
legislation and calling for improvements where they are
It is our view that the proposed Canadian legislation meets
Canada's obligations under the convention. That is extremely
important. We made it clear in our dealings with the government
that we would not support the proposed legislation unless, in our
view, it met our obligations under the convention. We want
Canada to be a leader in the implementation of this convention. It
is our view that this proposed legislation succeeds in that respect.
That is extremely important.
Although time has been limited, I have been able to consult
broadly with colleagues in Canada and elsewhere. I am
convinced that the legislation will find broad support in Canada
and internationally. I have consulted with my colleague
Mr. Davies, the business and legal communities and with my
colleagues internationally in Transparency International. There is
a solid response in every case. People are absolutely delighted
that Canada is moving on this particular issue.
Transparency International Canada strongly supports the
legislation and urges that you pass it as requested and that we
move on to the next stage.
I shall sum up by making the following comments. First, if
Canada does not ratify by December 31, it is almost certain that
the convention will not come into effect and we will not meet the
conditions for entry into force of the convention. It is absolutely
crucial that Canada ratify the convention by that date.
Once ratified, I would suggest that it is important that
Parliament play a role in monitoring the implementation of the
legislation. I understand that that process is in place or that there
will be an amendment to that effect, and Transparency
International would support that. We want to see Parliament play
a role in monitoring the legislation by way of progress reports
and debate on those progress reports. I can assure you that
Transparency International will be watching your debate as well
as participating publicly in it.
Third, we urge Parliament to encourage the Canadian
government to play a leadership role in ensuring a strong
monitoring role for the OECD. This is a rather unusual
convention in as much as it calls for the committee that advised
on the creation of this convention to continue in a monitoring
role. The exact nature of that monitoring role has not been
established. The OECD working committee will be doing it.
Canada has an opportunity to ensure that the committee does its
job, that it has the power that it requires to do its job, that it
supports the committee as it goes about its job, and that it
provides the kind of leadership that will "back off," as it were,
some of the countries that are not as enthusiastic about this as we
think they should be.
It is unfortunate but true that there are countries in the OECD
which are dragging their feet on this. I should perhaps tell you, to
give you some indication, that there were countries that signed
the convention in December of last year that, as they signed the
convention, had laws on their books which allowed their
companies to deduct bribes as legitimate business expenses in
their countries. Their having signed this convention means that
they now must remove those laws, and they must move
positively in the direction called for by the convention. That
simply indicates where we are and where we need to go and why
this convention is as important as it is. The first step will be to
eradicate that kind of law in countries in Western Europe in
Finally, we want the Canadian and OECD monitoring to be
transparent. This will be extremely important. We do not want it
to take place behind closed doors. When it occurs, we want it to
be transparent, and we want it to be open to the participation of
the voluntary sector as well as the private sector. We do not want
this to be a purely government activity. We want the private
sector involved in the monitoring process, as well as the
voluntary sector, and particularly organizations like Transparency
International. We invite you to urge the government to carry that
message forward and to ensure that it takes place.
For our part, Transparency International proposes to join with
other OECD country chapters in monitoring the implementation
of the convention. A worldwide committee of Transparency
International is coordinating the efforts of chapters like
Transparency International Canada and is already following
closely what is happening in various countries and bringing
pressure to bear. The Canadian chapter has been actively pushing
the government to table this legislation and to move it forward,
and it will continue in that role as time goes on.
We have a program planned to bring the legislation to the
attention of the business community and the public at large. We
are committed to ensuring that the business community is aware
of this legislation and its importance. We will be encouraging the
corporate sector to develop programs to ensure that the
legislation is respected in their activities, both with respect to the
letter of the legislation and also with respect to the spirit.
Mechanisms are available to corporations and there are programs
that they can institute, and we will be urging them to do that.
We will be active. This legislation will not just die. To the
contrary, it is absolutely crucial that it be implemented, as a first
step, and that it be monitored to ensure that it does the job that it
is supposed to do.
I will close now by saying that this is an extremely important
piece of legislation, much more important than might appear to
be the case from the perspective of a country like Canada at this
point in history. Countries around the world are watching Canada
now, and it is a remarkable opportunity for Canada to provide
leadership, both in the next week and also in the future.
Mr. Michael Davies, my colleague, wishes to make some
comments about the position of the business community,
specifically with regard to this legislation.
Mr. Michael N. Davies, Vice-President, General Counsel
and Secretary, GE Canada: Honourable senators, as Mr. Cragg
mentioned, one of the hats I wear is that of director and vice
chairman of TI Canada, the organization that Mr. Cragg
mentioned. The Canadian business community is an active
financial supporter of and actively involved in TI Canada.
Among our charter members, in addition to my own company,
are Alcan, Northern Telecom, The Globe and Mail, IBM, Placer
Dome, Ontario Hydro International, and others. The business
community in Canada is actively involved in the activities of
Transparency International and supports and believes in those
I wear and have worn another hat in connection with the
OECD convention. Approximately two years ago, the Canadian
Council of International Business established a new committee
called the "Committee on Corruption and Bribery," and they
asked me if I would chair that committee. Over the past two
years I have regularly attended meetings of the ICC and OECD
working group on corruption in Paris, providing strong input and
support from the Canadian business community to ensure that we
had a strong and effective convention.
More and more Canadian companies are now developing, as
you likely know, international or global codes of ethical conduct.
More and more Canadian companies are walking away from
contracts rather than getting involved in paying bribes in the
international arena. That is one of the reasons we so strongly
support this convention. Not only is it one of the most significant
steps forward in fighting and dealing with the damage that
corruption causes in Third World countries, but it will also help
to create a level playing field for the Canadian business
community where we can compete fairly in the world on the
basis of quality, price, and service and not face competition that
is much more willing, potentially, to pay bribes than we are.
As Minister Axworthy mentioned, in order for the convention
to become effective, five of the top 10 trading countries in the
OECD must ratify before the end of this year. Four of those
countries have ratified; some other countries not within the
top ten have ratified. For example, Iceland has ratified. More
than four have, but only four within the top ten. It is a
tremendous opportunity for Canada to confirm our leadership
role in the international arena in the areas of promoting
transparency, good governance and anti-corruption measures if
we are the country that takes this thing over the top and brings it
into effect by being the fifth country to ratify between now and
Along with TI and through TI and independently, the business
community, CCIB, and the Canadian Chamber of Commerce, we
have been contacting representatives and writing to
representatives of the government and the opposition parties and
speaking to many of you, urging the Canadian Parliament to
bring this into effect and put it on a fast track in order to have it
passed through both Houses of Parliament before the end of the
year so that the convention will come into effect at that time.
Having come into effect, to answer a question that was asked
earlier this afternoon, the impetus that this will then provide to
bring other countries into signing the convention would be
amazing. At the last meeting of the OECD that I attended
approximately a month ago in Paris, a status report was given by
all of the political representatives of the 29 OECD countries. We
were not party to that, but it was summarized for us
subsequently. Each country was called upon to report where they
were in the implementation of the convention, what their plan
was, their process, their timing, and their scheduling. The peer
pressure that is brought to bear within the meetings of the OECD
convention will be tremendous, particularly if the convention is
brought into effect, as it is scheduled to be, by the end of this
year. The next meeting of the ministers of the OECD takes place
in May. At that point, every country will have to report on where
Something else that was mentioned, which is very important
and which we promoted within TI and the business community,
is that the OECD working group, having brought the convention
into place, will not just walk away. There is an OECD working
group monitoring the process. They will not only monitor the
legislation that the various countries enact with regard to how it
relates to the convention and fairly applies the convention, but
will also monitor how the various signatories to the convention
are enforcing and effecting that legislation. Therefore, the risk of
countries passing hollow legislation without enforcement is
I thank honourable senators on behalf of the CCIB, the
Chamber of Commerce and the business community for your
efforts in supporting this legislation and bringing it forward on a
fast-track basis so that Canada can put it into effect and be an
international leader in this area.
The Chairman: Thank you both for your presentations.
Senator Lynch-Staunton: I am delighted that colleagues have
had the opportunity to hear from these two witnesses about the
work of Transparency International. I became more familiar with
their work by chance last spring when I read an article on its
founder, a former senior official of the World Bank who had seen
so much international bribery and corruption that he decided
something had to be done about it. In only a few years, as was
explained, TI has taken a lead - if not the lead - in developing
conventions and legislation to try to put a halt to this terrible
practice. It is an NGO of which we have reason to be proud here
in Canada. I congratulate Mr. Cragg and Mr. Davies and thank
them for coming here this afternoon. Their support of the
legislation reassures us that we are on the right track. They are to
be commended for leaning on the government to ensure that the
bill was brought before us before the end of the year; not so
much to get credit for being in the top five, but to ensure that the
convention is not sabotaged by missing the deadline. Now that
we are on-side, the convention is safe, and it is to be hoped that
the next few years will show positives results.
Thank you for telling us your story, which has impressed
Senator Grafstein: I wish to join Senator Lynch-Staunton in
commending Transparency International and its NGO here in
If you have the opportunity, you should read the recent report
tabled in the Senate by the Foreign Affairs Committee entitled:
"Crisis in Asia: Implications for the Region, Canada and the
World." Appendix 5 of that report is a comprehensive list of
human rights violations relating to the 16 countries or states in
that region. That material all came from two sources: the
U.S. State Department, which does an annual human rights report
review country by country, and the Human Rights Watch World
Report, which also does that on an annual basis.
Is it the intention of Transparency International to do a
country-by-country report on an annual basis, or is that already
Mr. Cragg: The association you have made between human
rights and corruption is an important one. Although it does not
relate directly to your question, I wish to emphasize that there is
increasing concern about the impact of corruption on the respect
for human rights. Transparency International is becoming a
leader in articulating those concerns and in moving people to
understand that respect for human rights and corruption are
closely connected. We must work on both fronts.
With respect to monitoring countries, yes, we currently have
something called the Corruption Perceptions Index, of which
some of you will perhaps be aware. This is quite a sophisticated
analysis of the perception of corruption in different countries
around the world. We rank those countries in our index. It is an
extremely influential analysis that is used around the world. It
has had quite an impact on countries that find themselves close to
the bottom of the list, as well as others.
It is worth noting that Canada has consistently appeared at the
top of the list; that is to say, it is one of the countries in which
corruption is perceived to be not a great problem. We should be
proud of that. That is one of the analyses that we do.
We are in the process of forming another analysis. We have
been criticized for that one, particularly by people from the
developing world, most of the countries of which find themselves
at the bottom of the list. The criticism is that it is a
finger-pointing exercise and that we are not acknowledging, in
our Corruptions Perceptions Index, the role of the industrialized
world in promoting corruption. We are in the process of
developing what we are calling a Corruption Propensity Index,
which will rank countries according to the inclination of their
companies to engage in corruption. The results of that analysis
will be surprising and quite uncomfortable.
This is another way in which Transparency International is
trying to ensure that appropriate pressure is applied to both the
countries supplying the bribes and those receiving them.
Senator Kinsella: Mr. Cragg, in the paper you gave in
Bangkok five weeks ago on human rights and business ethics,
you drew from Ghandi. You referred to the fact that we celebrate
the fiftieth anniversary of the Universal Declaration of Human
Rights this year. Indeed, next week will be a special week as we
approach December 10.
You wrote that we need to remind ourselves, as Gandhi and
others have pointed out, that wealth without work and commerce
without conscience are formulas for human exploitation, not
Would you share with us your view of the relationship of this
kind of initiative - both the convention and the legislation with
which we are now dealing - to your view?
Mr. Cragg: That is a complex question. All senators are
welcome to read that paper, should they wish to do so.
Corruption is just one element in the process. It is quite clear
that companies that engage in corruption show considerable
contempt for the rights and the status of the people who are being
corrupted; both those receiving the bribes and those damaged by
them. We frequently do not realize this.
As well, we do not realize that the suppliers of bribes are
actually involved in the encouragement of bribery. We tend to
think that there are people always willing to take bribes and that
the bribers are simply responding to something placed before
them. That is not the case.
Companies will frequently offer bribes where none are being
requested, particularly if they believe that bribery is prevalent. It
becomes very difficult for people, particularly public servants,
not to accept bribes when their colleagues are being bribed. It is
very difficult to stand up under that pressure.
We are hoping that this legislation will encourage corporations
to look at the values around which they are building their
corporate enterprises and to ask themselves whether these are
appropriate values. The anti-corruption effort will certainly ask
them to look at the way in which they treat the people with
whom they deal, particularly in the developing world. We hope,
as Michael Davies has already suggested, that this will encourage
corporations to develop codes of ethics which, among other
things, will provide guidance to their people, their agents and
their employees to ensure that they stay away from questionable
It is also the case that there are clauses in this bill which can
be interpreted narrowly and broadly. Facilitation payments are a
problem. They are in the bill and we recognize that that is
appropriate, but we also want corporations to move on that front.
We think that this bill will encourage them to look at the values
that are operating, to develop codes, and to provide guidance for
their employees and agents which will lead them to a higher
ethical standard of business conduct.
Senator Kinsella: This chamber of Parliament has a good
track record of carefully analyzing proposed legislation. We can
fast-track this particular bill because we have already done a lot
of work in this area. Reference has been made to the work of
Senator Stewart and his committee. Other committees and
individual members of this place have been studying this area for
I expect that this bill will be passed in the Senate today, but I
cannot anticipate what will happen in the House of Commons,
because we have no control over what goes on there.
My reading of the convention is that Canada can ratify that
convention; indeed, Canada could do so this afternoon or
tomorrow morning. My reading of it also suggests that it is not
necessary to have this particular bill enacted by Parliament in
order for Canada to ratify the convention. Therefore, if the bill is
slowed down in the other place, would your organization not see
it as a good tactic to pressure the government to deposit the
instrument of ratification pursuant to section 14 of the
convention so that we can still be the fifth country to bring the
convention into operation?
Mr. Davies: We would certainly be delighted if the
government were to do that. Indeed, earlier we inquired of the
government whether that might be possible if the legislation were
not to go through. The explanation given to us, similar to that
provided by Minister Axworthy today, was that to the extent that
ratification of the convention involves an obligation to pass
legislation, it is something the government hesitates to do
without Parliament actually having passed the bill. Since
Parliament has the right to do what it wants, there is a reluctance
to purport to commit Parliament in that way. I do not purport to
understand the legalities of the matter, but that is the explanation
that was given to us.
I might say that we are fairly confident and believe that it will
go through the House of Commons next week. Wearing our
Transparency International hat, we have written to all members
of opposition in Parliament seeking their support, as have the
Canadian Council for International Business and the Canadian
Chamber of Commerce. We hope to have fast-track passage
through the House of Commons next week. If it does not, and if
there were any way to convince the government that Canada
could ratify nonetheless, we would be delighted to do that.
Mr. Cragg: We will take your advice. We certainly want to
follow any path that would lead to ratification by the end of
December, and we will certainly listen closely to
recommendations that come from senators on that subject.
However, while Transparency International has felt quite
uncomfortable about the fact that we are pushing the deadline as
we are, and that debate is limited - and clearly, that is the case
- there is a positive side to this particular situation. If this bill
passes, it will pass with the full support of the Canadian
Parliament. It will be absolutely clear that that is the case.
Because passage of the bill will have required the cooperation of
all the parties in the House of Commons and all the members of
this chamber, its impact will be very much greater than otherwise
would be the case.
I urge Parliament to continue on this path now that we are on
it. It was not our preferred path but, clearly, it has some
significant benefits. The symbolism of the ratification by Canada
under these circumstances - both for our own business
community and for the international community - will be
greatly enhanced, in my view.
Mr. Davies: I concur in the thoughts expressed by my friend.
Senator Joyal: I should like to commend our two witnesses
this afternoon. Could you tell us how you recruit your
membership in Canada? Can you tell us from which walks of life
members of Transparency International are recruited? In other
words, what is the kind of membership you hope for?
Mr. Cragg: Transparency International is a voluntary sector
organization or NGO. It has a number of different categories of
membership. Our membership comprises individuals from all
walks of life: academics, professionals, business people, people
who have no particular profession, people who are retired. We
have a substantial individual membership.
We have a category of membership for organizations,
including voluntary organizations and government departments,
if they wish to join - and some have. For example, the ethics
counsellor's department is a member of Transparency
International. We also have corporations which are members.
We have two categories of membership at the top end. One is
for just simply organizational membership but there is also
provision for charter membership. Charter members commit
to $10,000 over two years to ensure the financial stability of the
organization. We have quite a number of charter members.
The board of Transparency International is comprised of
members from the business community, academics, members
from the voluntary sector, and professionals. We are attempting
to create a balanced board which resembles a variety of
perspectives and is also representative, both geographically and
linguistically. We have francophone and anglophone members, as
well as colleagues from across the country.
Senator Joyal: Could you give us a rough idea of your
membership, in all classes?
Mr. Cragg: I should know but I have been distracted over the
last few weeks by these matters. I believe we have between 50
and 100 individual members and between 10 and 20, perhaps
more, organizational members of Transparency International at
the present time.
Senator Joyal: I should like to move on with a question on the
bill itself. You might have heard my questions to the Minister of
Foreign Affairs earlier this afternoon concerning
subclause 3(3)(a), which gives a blessing to activities that would
be allowed, permitted or required under the laws of the foreign
state. You said in your presentation that there are some countries
around the world wherein you expect the legislation to be
changed because some behaviour or acts that would be subject to
reprimand under Canadian legislation would be allowed in those
Are you satisfied that such an interpretation of the bill would
be considered a loophole? Considering the objective of your
group and your plea to us today to pass the bill as it stands, are
you comfortable with that interpretation of that particular
Mr. Cragg: The basic response is that we would be
comfortable with the legislation as a first step. We want the bill
Whether these various components of it are adequate is
something we will have to examine as it goes along. We will be
watching closely. If we think clauses such as this are not
adequate, then we will recommend amendments to the Canadian
government. We will do that as quickly as is necessary.
This is an area of interest to me. I am not aware of any country
in the world that does not have anti-corruption legislation on the
books. Corruption is not legal and bribery is not legal any place
in the world of which I am aware. The real question is how
efficiently the law is enforced. We want to encourage the
Canadian business community not to take advantage of countries
where enforcement is problematic. That will be one of our
objectives. We will also be working with chapters around the
world. It is important to recognize that this is a worldwide effort
to support them in strengthening legislation in their own
jurisdictions. I can assure you that this is already going on.
As I say, we are part of a worldwide effort. We will be
monitoring the Canadian compliance to it and the effectiveness
of Canadian legislation. We are happy that this step is being
taken, and we think it is such an enormous first step that we want
to support it in all aspects.
Mr. Davies: The main problem internationally is not that the
laws do not exist, but that they are not enforced in some
countries. The OECD working group did a study of the laws that
exist around the world and generally confirmed that bribery is an
offence in every country. However, in some countries they do not
pay any attention to it, or the judiciary is controlled by the state
and it is not applied.
It is a specific provision in the convention, as agreed to by the
various countries, that it would not be an offence if the advantage
were permitted or required by the written law of the domestic
country. The legislation is in conformity with the convention.
There will be ongoing monitoring and review of the
effectiveness of the convention, and further recommendations
will be coming forward from the OECD and from ourselves in
Senator Joyal: Many parliamentary associations deal with
various regions of the world, such as the Commonwealth, the
Francophonie, the North American and South American groups,
and so on. Personally, I feel, in the forthcoming months in our
international meetings, that we should make a point on the
agendas of all those parliamentary associations to raise the issue
of this convention so that the objective of this convention is
placed on almost the same footing as human rights. You made
the association between the two. This is a means of establishing
better respect for individuals.
You heard the question we put to the minister, namely, what
kind of initiative we could take after the passage of this
legislation by both Houses of Parliament to improve the
implementation and fostering of that convention. Do you have
other suggestions to make today in order that we can achieve
Mr. Cragg: Yes. Transparency International is active in those
various associations or with respect to those governments. The
next step is to urge the government to move on the OAS
Canada has an opportunity with respect to the FTAA work that
is currently going on. Canada has remarkable opportunities to
advance the agenda because it finds itself in a chairmanship role.
One of our colleagues on the board, Arthur Kruger, who is in
the gallery, has been assigned specific responsibility for tracking
Canada's response to the OAS anti-corruption convention. We
want Parliament to urge the government now to move on that
front as well.
We are also working collectively with Transparency
International colleagues in appropriate chapters on APEC. We
have a committee working at that level. Here, again, we want to
see Canadian leadership, and I think Canada is in a position to
We are working wherever there are associations of that sort.
Transparency International forms groups designed to push their
individual countries to advance the anti-corruption agenda.
The OAS and APEC fora are extremely important. We have
also urged Canadian representatives in international financial
institutions to pay particular attention to the anti-corruption
agenda. We have executives on the board of the World Bank, the
International Monetary Fund, the Asian Development Bank and
similar institutions. That is another extremely important area. We
would like to see those international organizations thinking
creatively about how they can encourage the development of an
anti-corruption agenda in their activities.
Mr. Davies: This is another area where Transparency
International and the Canadian business community are operating
in cooperation with each other in an attempt to achieve these
ends in other parts of the world. The Canadian committee of the
Pacific Basin Economic Council was instrumental about two
years ago in establishing a transparency committee within PBEC.
Its first chairman was a gentleman from Placer Dome in
Vancouver who had to step down last May. I was asked if I
would take on the chairmanship of the PBEC committee on
transparency where we are attempting, in cooperation with
Transparency International Canada and Transparency
International internationally, to bring transparency into the Asian
community by signing on to the OECD convention.
We are also attempting to develop a tight form of regional
agreement on transparency and government procurement either
in APEC or the WTO. Again, it is another area where the
business community in Canada and Transparency International
Canada are closely working together to spread this transparency
initiative further around the world.
Senator Atkins: Does Transparency International believe the
penalties are tough enough in this legislation?
Mr. Cragg: That is an interesting question. Determining what
counts as a "tough penalty" is difficult.
Our view is that, yes, it is an indictable offence. It is
sufficiently tough that it would make any executive that I know
of stand up and take notice. If you are the CEO of a company,
five years in prison is pretty significant punishment.
It is also the case that by virtue of the way in which this piece
of legislation connects with the Criminal Code, as I understand
it, corporations will be liable to fines of an indefinite size. There
is no limit on the size of fine a court can impose on a corporation
if it is in breach of this law. I think that is significant as well.
Corporations will face significant financial risk if they do not
respect this legislation. The short answer is, yes, I think this is an
appropriate move with respect to penalties.
In addition, we would like to see the government thinking
more about how it can provide positive incentives rather than
after-the-fact punishment, and how they can encourage
corporations to put in place compliance programs that will, in
turn, lead to less inclination to engage in this behaviour. We will
be talking to the government about that over the coming months.
Senator Stewart: As honourable senators will know, I am
uneasy about some of these conventions because representatives
of government have signed them in good faith, and then it turns
out that they do not have the ability to deliver the fulfilment of
When the Minister of Foreign Affairs was here, I asked a
question concerning the impact of this proposed legislation on
Canadians trying to do business in other countries. I want to turn
that coin over and ask you this: Will Canadian business be
disadvantaged by Canadian conformity to the convention while
enforcement remains problematic, to use your language, in some
Mr. Cragg: First, this will be carefully monitored. Countries
that are lax in their enforcement of the convention will be
criticized publicly and internationally by both Transparency
International and the OECD monitoring committee. The
enforcement will be monitored, but that is not the case with all or
even most conventions. That is an important factor.
I want to put a different spin on it. I get very uncomfortable
when people suggest that, somehow, dishonest people have an
advantage over people who are honest in the business
community. I do not want to be excessively idealistic but I
suggest to you that if Canada creates an environment where
corporations are encouraged to conduct honest business, that may
very well turn into a positive business advantage for those
I do not know of anyone in any country of the world who
prefers to do business with a dishonest person or a dishonest
corporation. Corporations which are honest and which are known
to be honest have a clear business advantage in many business
transactions. Let us not just think about the advantage of
blocking people from dishonest behaviour. Think about the
advantages that come to a business community which is
developing appropriate standards of business conduct.
Mr. Davies: Our current strong belief is that the Canadian
business community is more disadvantaged today than it will be
under the convention because more and more Canadian
businesses are voluntarily complying with the convention. That
is the way they do business internationally. With the transparency
and the corporate governance aspects that we have in Canada,
more and more companies have strict codes of conduct.
There were concerns that one or two countries would sign on
to the convention and that the others would do nothing. Then
those countries with the legislation would be disadvantaged. That
is one reason for the requirement of a minimum of five of the top
ten exporting countries to sign before the convention can take
effect. Then the peer pressure will take effect.
The business community and Transparency International were
both active in pushing for an effective, ongoing monitoring
program. We did not have to push too hard; it was supported all
around. That program is to ensure that other countries are not
only coming on board but are passing the appropriate legislation
and taking steps to enforce it. There will be opportunities for
monitoring by one country of the activities of another country,
and that will be ongoing.
We are confident that, within the business community, we will
be much better off under the convention and able to engage in
business the way we desire, which is on a level playing field.
Senator Andreychuk: In light of the late hour, I will not
request answers to all of the questions that I have.
I am aware of Transparency International and its creation. I am
also familiar with the founder with whom I worked when he was
at the World Bank.
This is my concern. So much of the lending in the developed
world goes through the World Bank and the IMF to regional
lending institutions. What role do you foresee for these
institutions which have access, information and control over
much of the funding?
Mr. Cragg: Briefly, there should be a substantial role, a
greater role than is the case presently. However, it is worth noting
that we have come an enormous distance. Those institutions are
in a position to provide real leadership and to create an
environment where companies are encouraged to tackle these
kinds of problems and to develop honest corporate cultures. I
think they can do a good deal.
We began by having conversations with the Canadian
representatives of the international financial institutions. Canada
can provide leadership there as well. CIDA is doing that. We can
only progress on that street.
I hope you carry that interest forward. We would be happy to
work with you to encourage these institutions to move on
Mr. Davies: Transparency International has two or three
senior executives or officers who have come out of the World
Bank. They are active in working with the World Bank and other
international funding agencies, as we are with CIDA, to bring
The president of the World Bank is committed to bringing
more transparency into the World Bank. They now require
contractors on World Bank contracts to disclose the amount of
commissions that they pay sales representatives on any contract.
That is one step forward. They are looking for other
The International Monetary Fund is beginning to impose
conditions and certain governance requirements related to
lending in Third World countries. They are starting to move
slowly, but we will continue with TI and elsewhere to
Senator Prud'homme: You mentioned a few minutes ago that
the convention was signed on January 25.
Mr. Cragg: Yes, that is right.
Senator Prud'homme: Today is December 3. Why the wait?
A word that I am hearing from everyone is "fast-track." This is
December 3, a Thursday night, and many senators have made a
sacrifice and cancelled their flights. It is not your fault, but I
want to know where it is written in the Rules of the Senate that
we should take orders that include haste and precipitation?
We have two great witnesses who are backing up the minister.
I am not saying that we could find a contrary witness who would
be in favour of corruption, but these are our only witnesses.
Usually we have witnesses who differ with each other.
My question is whether we could have done this earlier? Was
there any impediment?
Mr. Cragg: I cannot answer that question. You know the
political process better than I.
Senator Prud'homme: Yes, but this convention was not
drawn up today. We will draw our own conclusions. I do not
want to embarrass you. It has been known since January 25 that
this was to take place; is that not correct?
Mr. Cragg: This is true.
Senator Prud'homme: When did Great Britain, Germany,
Japan and the fourth one sign? That may encourage us to hurry
Mr. Cragg: This has all been very recent. To bring a
convention into effect in the course of a year is, in some respects,
unrealistic. People were critical. They worried that they had set
the bar too high in that respect. Countries have had difficulty
meeting the time constraint; there is no question about that.
Canada has also had difficulty meeting the time constraint.
Perhaps it is the case that the bar was set too high.
The Americans were certainly at the front, but you must
remember that they had a foreign corrupt practices act already in
place and it was just a matter of amending that. The others acted
Senator Prud'homme: You talk about the OAS, the OECD
and so many organizations.
Is it not the responsibility of the United Nations to ensure the
convention is applied, honoured and followed? The United
Nations has all the means at its disposal. I am one of the old
parliamentarians and I have some hesitancy with this burgeoning
of organizations and agencies. Senator Joyal spoke of
parliamentary associations. Each association plays the role of the
UN instead of being concerned strictly with the reason it was
created. The associations also become responsible for human
rights. Could I suggest, for further consideration, that it become
the responsibility of a committee of the United Nations?
Mr. Cragg: The broad answer is "yes." The United Nations
has been trying to address the issue of corruption since the 1970s.
Quite recently, the United Nations took up the issue again.
We must look to whoever will be most affected in the
particular framework in which we are working. The importance
of this particular action is that it is the industrialized countries
getting together to make a decision which applies to them. It is
difficult for the United Nations to point the finger at a single
group of countries in the way in which the OECD can.
In this case, this is an appropriate initiative for the OECD. I
encourage Parliament to support the efforts of the United Nations
in this direction.
Senator Prud'homme: Earlier, a senator mentioned a report
by the American Congress on abusers of human rights in the
world. I am sceptical about that report. I remember when a lobby
firm was hired to ensure that Turkey would not be singled out by
a congressman in California who, in fact succeeded in having
Turkey withdrawn from the list.
I take it that you will be strict with those who are guilty of
Mr. Cragg: We promise, senator.
The Chairman: Honourable senators, the Chair has a
problem. It is now six o'clock and under rule 13 I have no choice
but to rise and report progress unless there is agreement
otherwise for the Chair not to see the clock.
Hon. Members: Agreed.
The Chairman: It is agreed that I will not see the clock.
I wish to thank Messrs Cragg and Davies for their openness -
indeed, their transparency. We appreciate their contribution. We
wish you well in your future endeavours.
Honourable senators, the committee will now proceed to the
adoption of the clauses of the bill.
The title of the bill, as well as clause 1, have been postponed.
Shall clause 2 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 3 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 4 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 5 carry?
Hon. Senators: Agreed.
The Chairman: Carried
Shall clause 6 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 7 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 8 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 9 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 10 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 11 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 12 carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall clause 1, the short title, carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall the title carry?
Hon. Senators: Agreed.
The Chairman: Carried.
Shall I report the bill without amendment?
Hon. Senators: Agreed.
Hon. Shirley Maheu (The Hon. the Acting Speaker):
Honourable senators, the sitting of the Senate is resumed.
Hon. Eymard G. Corbin: Honourable senators, the
Committee of the Whole, to which was referred Bill S-21,
respecting the corruption of foreign public officials and the
implementation of the Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions,
and to make related amendments to other Acts, has examined the
said bill and has directed me to report the same to the Senate
The Hon. the Acting Speaker: When shall this bill be read
the third time?
Hon. Lucie Pépin: With leave, now, honourable senators.
The Hon. the Acting Speaker: It is moved by the Honourable
Senator Pépin, seconded by the Honourable Senator Joyal that,
with leave of the Senate and notwithstanding rule 58(1)(b), the
bill be read the third time now.
Is it your pleasure, honourable senators, to adopt the motion?
Hon. John Lynch-Staunton (Leader of the Opposition):
Honourable senators, I move:
That Bill S-21 be amended on page 6
(a) by adding the following after line 35:
12. Within four months of the end of each fiscal year,
the Minister of Foreign Affairs, the Minister for
International Trade and the Minister of Justice and
Attorney General of Canada shall jointly prepare a report
on the implementation of the Convention on Combating
Bribery of Foreign Public Officials in International
Business Transactions, and on the enforcement of this Act,
and the Minister of Foreign Affairs shall cause a copy of
the report to be laid before each House of Parliament on
any of the first fifteen days on which that House is sitting
after the report is completed."; and
(b) by renumbering clause 12 as clause 13 and any
cross-references thereto accordingly.
The Hon. the Acting Speaker: Honourable senators, is it your
pleasure to adopt the motion in amendment?
The Hon. the Acting Speaker: When shall this bill, as
amended, be read the third time?
Hon. Lucie Pépin: Honourable senators, I move that the bill
be read the third time now.
The Hon. the Acting Speaker: Is it your pleasure, honourable
senators, to adopt the motion?
Hon. Marcel Prud'homme: Honourable senators, I wish to
thank you for your patience. I will not vote against the bill.
However, I will certainly say "on division" when the vote is
After 35 years I have been through too many bad experiences
with fast-tracked bills in the other chamber. I strongly object that
a bill of such importance should be dealt with in this way. I am
not blaming the leadership in this regard. It is a fact of life.
However, some senator should stand up to say that this is not the
way to conduct the affairs of the Senate. This is an important bill
which has come to us at the last minute. It has been fast-tracked.
There were times when, in the other chamber, I should have
said "no" to such requests. However, we did fast-track some
bills, and we have had to live with those pieces of legislation for
a long time. I know that other bills will be fast-tracked.
I agree that it is important for our reputation that the world
know that Canada stands in the forefront of honesty, as if it will
change the human race and human habits. If someone has
decided to be corrupt, they already know how to bypass this bill.
Some people may think that I wish to defend the indefensible,
but my objection, and I want to be on record, is to this fast-track
process. I am not blaming the leadership of the Senate; that is
how it was put to them. It has come to the Senate and I do not
know how it will go to the House of Commons. Some senators
have acknowledged that it is quite fast. It only takes one senator
to say no to third reading today and then it will go to Tuesday of
next week. There is no other way if you know that the House,
most likely, will adjourn Thursday night of next week.
This is not the way to do this. The government of the day
should know better than to play around with important bills and
ask who is against motherhood, therefore, the senators will say
yes. Who will dare object? There is no risk of being unpopular, is
I will not call for a vote because I have someone who has
agreed to push for a vote. I do not need a seconder. I will not ask
for a registered vote but, when you ask if it is agreed, my answer
will be yes, but I will say "on division." I want that division to be
well registered as coming from me, unless there are others who
will join me.
The Hon. the Acting Speaker: Is it in your pleasure,
honourable senators, to adopt the motion?
Some Hon. Senators: Agreed.
Some Hon. Senators: On division.
Motion agreed to and bill, as amended, read third time and
passed, on division.
The Honourable Charles Gonthier, Puisne Judge of the
Supreme Court of Canada, in his capacity as Deputy Governor
General, having come and being seated at the foot of the Throne,
and the House of Commons having been summoned, and being
come with their Acting Speaker, the Right Honourable the
Deputy Governor General was pleased to give the Royal Assent
to the following bills:
An Act to establish the Canadian Parks Agency and
to amend other Acts as a consequence (Bill C-29,
Chapter 31, 1998)
An Act to implement the Comprehensive Nuclear
Test-Ban Treaty (Bill C-52,Chapter 32, 1998)
An Act to implement an agreement between Canada and
the Socialist Republic of Vietnam, an agreement between
Canada and the Republic of Croatia and a convention
between Canada and the Republic of Chile, for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income (Bill S-16,Chapter 33, 1998)
The House of Commons withdrew.
The Right Honourable the Deputy Governor General was
pleased to retire.
Committee Authorized to Meet During Sitting of the
Leave having been given to revert to Notices of Motions:
Hon. J. Michael Forrestall: Honourable senators, with leave
of the Senate and notwithstanding rule 58(1)(a), I move:
That the Standing Senate Committee on Agriculture and
Forestry have power to continue sitting at four o'clock in
the afternoon on Monday next, December 7, 1998, even
though the Senate may then be sitting, and that rule 95(4) be
suspended in relation thereto.
Hon. Eymard G. Corbin (The Hon. the Acting Speaker): Is
leave granted, honourable senators?
Resuming debate on the inquiry of the Honourable
Senator Carstairs calling the attention of the Senate to the
magnitude of family violence in our society and, in
particular, the need for collaborative efforts to seek
solutions to the various aspects of this form of violence.
-(Honourable Senator Robertson).
Hon. A. Raynell Andreychuk: Honourable senators, I should
like to commend Senator Carstairs for initiating this inquiry and
speaking so eloquently to the definition of violence, its
pervasiveness in our society, and for pointing out avenues that
could lead to solutions.
Noting the anniversary on December 6 of the École
polytechnique massacre in Montreal, and alluding to her own
tragedy, she demonstrated that this is an issue for all Canadians
and the key to its solution lies with all of us. I wish to underscore
a few points that Senator Carstairs mentioned.
In all the years that I served in family court or, for that matter,
in criminal court, family violence was the least understood and
the most horrific occurrence in our society.
After 10 years in family court, nightmare cases still haunt me
with little explanation of how such unspeakable cruelty can be
allowed to occur. Time and time again, I witnessed pictures and
actual children in my courtroom who had been deformed by
cigarette butts, had arms twisted or bodies beaten, or who were
emaciated from lack of food.
I can still hear the pathologist in a case describing the scalp of
an 18-month-old child who had been repeatedly hit against a
wall, and when the pathologist came to do his examination, he
touched the scalp and it collapsed like a balloon losing air.
I remember a child being sent out to play, losing his mitts, and
being punished by being sent out again in sub-zero temperatures
without gloves to teach the child a lesson. When the child
returned, with frost-bitten hands, the mother in a panic, finally
realizing that social services would be making a visit shortly, put
salve on the hands and woolen mittens and again sent the child
out so that she would not have to put up with him, as she said, in
the house. Again, when this child returned and the mother
attempted to remove the woolen mittens against frost-bitten
hands that had been laced with the salve, the skin was literally
torn off the hands of the child, permanently mutilating and
disabling the child.
I used to go home wishing, hoping and praying, that these
were isolated incidents. However, every day and every week
there was another case, another fact situation and another child
I witnessed women in common-law, marital and in casual
associations degraded, beaten and violated and, as Senator
Carstairs pointed out, I saw men demeaned and, in a few isolated
cases, beaten by so-called loved ones.
Unless we think that this is a Canadian or North American
phenomena, my years abroad in Africa and Europe proved to me
that we are not alone in violence. In many countries, these issues
become silent, unspeakable and unacknowledged by
governments and community leaders.
I am pleased that, in Canada, efforts are being taken to identify
these issues because the roots of violence are many, and often
rooted in history, culture and the attitudes of the people. There is
no single cause of violence and even when the cause of violence
can be identified, proposing solutions becomes a complex, costly
and difficult matter.
Therefore, an interdisciplinary approach is necessary. I am
pleased to support the Prairie Action Foundation in its campaign
to support the Prairie Research Network which is operating in
Saskatchewan, Manitoba and Alberta and focuses on
collaborative, practical and broad-based research into the
prevention of violence and abuse, in the evaluation of traditional
solutions and the development of new ones, and in public
education to break the conspiracy of silence in our homes,
schools and workplaces.
I commend Senator Carstairs for her dedication and
persistence, and others who have persisted despite odds to forge
a new Prairie alliance on this initiative.
There are two issues that must be addressed if we are to make
any inroads into the prevention of violence in families. It is
important to break the cycle of violence. Repeatedly, violence
was known to be used as a weapon because it was a weapon used
previously against the perpetrator. In so many cases that I dealt
with where excess of discipline was used, investigation into the
parental background disclosed that violence was part of their
upbringing. Intervention is necessary to stop this repeated
acceptance of violence as a mode of behaviour. While this is
easier said than done, strategies for intervention, assistance and
behaviour modification are necessary. Victims must also be given
the support, protection and assistance to gain the strength to
avoid, leave or overcome violent action perpetrated on them.
A combination of enforcement through the laws, education
and community is needed. Violent behaviour must not be
tolerated, hidden or excused.
What is perplexing to me is that while we, through our
political leaders and educators, reject violence, we nonetheless
contribute and encourage a culture of violence.
Organizations such as International Alert, which studies
children in conflict situations, draw the world's attention to the
plight of such children. Mrs. Machel of the United Nations
recently made an eloquent report on young children pressed into
service as soldiers. She stressed the devastation caused to such
children, and how it robs them of any hope of real efforts for
peaceful coexistence in their societies. Like the rest of the world,
we have no difficulty in condemning such actions.
Nonetheless, in our own society, one need only look around to
see what is the prevailing current culture that supports and
encourages violence. We need only to go to a hockey rink to see
the behaviour of parents or watch physical altercations rather
than sporting prowess take over our national sport.
One only needs to look at the Internet, videos, rap music or
current movies to see that violence has its cachet in our society.
Too often, brute strength is equated to power in our society.
My concern is the growing number of extremely young
children using violence in inappropriate ways such as
aggressiveness in schoolyards, and intimidation.
While studies in the past pointed out that violent movies,
video, rap music, et cetera, could not account for increased
negative behaviour except in isolated incidents, new studies are
pointing out that perhaps exposure to this kind of violent
portrayal to a teenager or an adult does not affect behaviour, but
there is now at least one major study that has pointed out that
children exposed at an early age turn to violence more easily as
Perhaps, as society lives with these new technologies, we will
see the long-term side effects. If we as a Canadian society say
that we do not tolerate family violence, it is incumbent upon us
to do more than utter mere words.
As we note the anniversary of the massacre at the École
polytechnique in Montreal, we should all stop and take stock of
our own behaviour and dedication to this cause.
I hope in some small measure this inquiry, spurred by Senator
Carstairs, will spur us to take action to curb the cycles of silence
and reject the culture of violence.
On motion of Senator Kinsella, for Senator Robertson, debate
Committee Authorized to Meet During Sitting of the
Hon. Lorna Milne, pursuant to notice of December 2, 1998,
That the Standing Senate Committee on Legal and
Constitutional Affairs have power to sit on Monday,
December 7, 1998, even though the Senate may then be
sitting, and that rule 95(4) be suspended in relation thereto.
Hon. Noël A. Kinsella (Acting Deputy Leader of the
Opposition): Honourable senators, I should like to have an
explanation of the motion.
Senator Milne: Honourable senators, the Legal and
Constitutional Affairs Committee has planned for quite some
time to meet all day next Monday. When it was announced that
the Senate would be sitting that day, I was not concerned because
when we sit on Mondays, we normally sit at eight o'clock in the
evening. However, when the sitting was scheduled for four
o'clock in the afternoon in order to accommodate the Christmas
plans of the Conservative Party, which I totally support, we had a
problem with the previously agreed upon appearance before the
committee of the new Solicitor General.
I generally do not approve of committees sitting while the
Senate is sitting but, because of this previously planned
appearance and because there is no other time at which the
minister can make himself available, I am asking for permission
for the committee to sit even though the Senate may then be
Senator Kinsella: I thank the Honourable Senator Milne for
that explanation. I agree that the committee should be allowed to
sit even though the Senate will be sitting at that time. However, I
will agree to it only for the purpose of the committee hearing the
minister and not for the conduct of any other business.
If necessary, honourable senators, I will move an amendment
to that motion. That will not be necessary if there is agreement.
The Hon. the Acting Speaker: Is it your pleasure, honourable
senators, to adopt the motion?
Hon. Senators: Agreed.
Motion agreed to.
The Senate adjourned until Monday, December 7, 1998, at