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C-45, Cannabis Bill - Bill to Amend—Third Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Dean, seconded by the Honourable Senator Dupuis, for the third reading of Bill C-45, An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, as amended.

Hon. Serge Joyal: Honourable senators, I want to bring to your attention the concerns that have been raised at the Legal and Constitutional Affairs Committee regarding the issue that Senator Carignan mentioned in relation to the protection of the licit and legal cannabis market from organized crime. You will remember, of course, the two policy objectives of the government. One is to promote health among Canadians, especially youth, and the second is to exclude organized crime, which controls, according to the testimony we heard at the committee, more than 50 per cent of the cannabis market in Canada.

But what we have heard, which is of greater concern, is the fact that the medical or therapeutic cannabis market has already been invaded by organized crime. In other words, the cannabis you can buy in a store, which is essentially the available cannabis the doctor has prescribed — even that cannabis that you buy legally on the street — is infected by organized crime. It’s not me who states that; it’s the President of the Canadian Association of Chiefs of Police, Mario Harel, who testified in front of our committee on March 29, 2018. I want to read to you what Chief Harel stated:

We also ask the Federal Government to enact strict security clearance requirements that would safeguard against criminal organizations becoming licensed growers as has been observed in the medical marijuana regime.

I repeat: “. . . becoming licensed growers as has been observed in the medical marijuana regime.”

The CACP remains concerned with the inclusion of organized criminals as licensed growers/distributors in the new cannabis regime since organized crime has infiltrated the medical marijuana industry. This is a major problem, in our view.

That’s what the President of the Canadian Association of Chiefs of Police stated to us two months ago.

I also want to quote from Superintendent Yves Goupil from the RCMP. He is the Director of Federal Policing Criminal Operations. He stated:

. . . yes, there are organized crime groups that will certainly use tax havens or even so-called beneficial ownership, where they are hiding behind corporate secrecy to invest and get licences to produce cannabis.

In other words, the RCMP and the various police groups in Canada are aware that the legal market of therapeutic cannabis is already infected by organized crime, and there are serious grounds to be concerned that the new market that will be open for the general consumption of cannabis will also be infiltrated by organized crime.

In an article published in January, Le Journal de Montréal gave a list of 35 companies out of the 86 producers that have been authorized to produce cannabis. I have the list here, and I’m going to provide it to you so that you have an idea of how much money has been invested by those hidden funds in fiscal paradises in the various Canadian companies: AbCann Global, Cayman Islands, $12.4 million; Aurora Cannabis, Cayman Islands, $32.5 million; CannTrust Holdings, Bahamas, $549,000; Supreme Cannabis Corporation, $130,000, Bahamas. And there are five others invested also in those companies; I’m just naming the major ones. Cannabis Wheaton Income, Cayman Islands, $20.5 million; Hydropothecary — which was mentioned in the Senate yesterday — Cayman Islands, $15 million, and Bahamas, $751,500. DelShen Therapeutics, $3 million; Cronos Group, $225,000; Newstrike Resources, $70,000 from Singapore; Emblem Cannabis, $8.3 million, and more than seven fiscal paradises have invested in that company. Golden Leaf Holdings, Bahamas, $308,000, and $5.7 million from Cayman Islands; Invictus MD, Seychelles, $765,000; Maricann Group, $9.76 million; the Green Organic Dutchman, $100,000 from Barbados, $115,500 from Bermuda, $553,000 from Cayman Islands, and from the United Arab Emirates, Dominican Republic, Luxembourg, Switzerland, Aruba, Panama, Malta, Virgin Islands, Belize, Marshall Islands — if you want the amount of money listed with these names. Harvest One Cannabis, $600,000 from Luxembourg and four other fiscal paradises. WeedMD, Cayman Islands, $2 million; Delta 9 Biotech, $300,000 from Singapore — and so on, honourable senators.

From the Cayman Islands, more than $250 million has been invested in Canadian companies that have received a permit. This is not an imagined or fabricated story; those are the real figures.

So when I heard Chief Harel, on behalf of the Canadian Association of Chiefs of Police, asking us what I quoted earlier —

We also ask the Federal Government to enact strict security clearance requirements that would safeguard against criminal organizations becoming licensed growers as has been observed in the medical marijuana regime.

— I really paid attention, because the facts aren’t quite clear. At least half of the companies that received a permit have received hundreds of millions of dollars of fiscal paradise investments from people whose identities we don’t know at all. No one knows their identities, unless we accept the amendments proposed by Senator Carignan that their identities will be made public. It will be for any Canadian to look into the registry and know the identity of who is selling the product, who is benefiting from its profits and who is reinvesting or sending the profits outside Canada and avoiding taxes.

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One of the key features of the regime that the government proposed is to make sure that the benefits are shared with the provinces at 75 per cent, with the Aboriginal people receiving part of it, so that everybody will be in a position to assume the additional social costs that the regime will, of course, trigger once it is implemented.

If we allow almost half of the companies that will get the permits to shift the benefits out of the country and pay minimal taxes of 1 or 2 per cent, it means that the overall aggregate of money available to share with the provinces will be diminished by as much.

It seems to me that there is an element of public good to have the capacity, as is proposed in the amendment of Senator Carignan, to know who those people are who benefit from the regime. There is nothing secret about this.

If we are to establish a regime that will fight organized crime to leave the market and promote legal cannabis, I think it should be legal from the top down, not only from the people who go to the store and buy and pay over the counter, but from all those who will shift the profit somewhere else.

It seems to me that we have to give a lot of credit and weight to the testimony we heard from the RCMP and the Canadian Association of Chiefs of Police to know the identity. We were told that knowing the identity is the key factor in controlling the illicit production of cannabis.

So, honourable senators, I support —

The Hon. the Speaker: I’m sorry, senator, but your time has expired.