Bill C-53, An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime), was introduced by the Minister of Justice and Attorney General of Canada, the Honourable Robert Nicholson, and received first reading in the House of Commons on 14 April 2008.
Although the bill is directed essentially to auto theft, it also addresses trafficking in, exporting and importing any property obtained by crime. The bill therefore amends the Criminal Code (the Code) in three ways:
With respect to the VIN, former Bill C-64(1) had created a similar offence. Bill C‑64 died on the Order Paper when the last general election was called.
According to a report published by Statistics Canada, the rate(2) of motor vehicle theft has been declining since 1996,(3) with the exception of 2001 and 2003, when it rose.(4) Data for 2006 confirm that the motor vehicle theft rate has fallen by 20% since 1996.(5)
However, motor vehicle theft has a major effect on vehicle owners, third party victims, law enforcement agencies and the insurance industry. According to the Insurance Bureau of Canada, it costs insurers and the public close to $1 billion a year.(6)
In 2006, nearly 160,000 motor vehicle thefts – roughly 438 a day – were reported to police.(7) Rates tend to be lower in eastern Canada than in the West. Again according to 2006 statistics,(8) Prince Edward Island had the lowest rate (115)(9) and Manitoba the highest (1,376),(10) nearly three times the Canadian average (487).(11)
This could be explained in part by the fact that Winnipeg has the highest rate of all the major metropolitan areas (1,932).(12) It should be noted, moreover, that vehicle theft tends to be concentrated in the major urban areas. According to 2005 figures, the rate of motor vehicle theft in major urban areas (559) was about 25% higher than in small urban areas (442) and 80% higher than in rural regions (307).(13)
In addition to Winnipeg, Regina and Vancouver have had very high rates for more than 10 years.(14) Between 1992 and 2002, vehicle theft rates doubled in London, nearly tripled in Regina and virtually quadrupled in Winnipeg.(15)
Although cars were still the type of vehicle most frequently stolen in 2004 (56% of all thefts), trucks, including mini-vans and sport utility vehicles, are increasingly popular among thieves (35% of all thefts).(16)
A criminal who steals a vehicle may want it for various purposes. He or she may want to use it as a means of transportation or to facilitate another crime. The motive may also be thrill-seeking,(17) as frequently occurs among young offenders. In general, vehicle theft is more closely associated with young offenders than other offences.(18) In addition, vehicle thefts committed by young offenders often result in accidents causing serious injury or death.(19) To help prevent this kind of crime, the federal Department of Transport amended the Canada Motor Vehicle Safety Standard (CMVSS 114) in February 2005. As a result, starting in September 2007, automobile manufacturers have had to install anti-theft immobilization systems in most new light vehicles sold in Canada.(20)
Bill C-53 aims to address the problem of motor vehicle theft, specifically by assisting law enforcement agencies in more effectively fighting organized vehicle theft, since criminal organizations often falsify vehicle identity and export vehicles from Canada.
The theft and resale of vehicles, facilitated by the alteration of VIN numbers, is a relatively low-risk,(21) high-profit(22) activity that is commonly used to finance criminal organizations’ other activities. According to a study conducted by the Royal Canadian Mounted Police in 1998,(23) criminal organizations are involved in all aspects of vehicle theft: the ordering of specific vehicles, recruitment of young offenders who steal the vehicles, dismantling of vehicles for parts (“chopping”),(24) altering of VINs and documents, and the transportation of stolen vehicles outside the province or country. According to the Insurance Bureau of Canada, of the 170,000 vehicles stolen each year, 20,000 are exported out of Canada.(25)
These multi-level(26) criminal networks have all the necessary expertise to obtain, deface and resell stolen vehicles on a large scale. It is estimated that one in five vehicle thefts is attributable to organized crime networks.(27)
While vehicle theft by organized groups is a national problem, the major urban areas of Quebec and Ontario are particularly hard hit.(28) According to 2002 data, Montréal(29) and Halifax had the highest rates (respectively, 354 and 151 unrecovered stolen vehicles per 100,000 inhabitants).(30)
Luxury cars and trucks are most often the target of organized groups.(31) We would note that automobile dealerships (41%) and private residences (34%) are the preferred locations where criminal organizations find the vehicles they seek.(32) Since sought-after vehicles are often protected by high-tech anti-theft systems, thieves sometimes steal the keys by breaking into private homes and dealerships, thus causing a series of offences.
Under the Motor Vehicle Safety Regulations,(33) the VIN, which is affixed to every vehicle in Canada, consists of 17 alphanumeric characters that provide a unique identifier for every motor vehicle.(34) Based on the established codes, certain characters designate, for example, the manufacturer, make and class of the vehicle, the model year, the plant where the vehicle was manufactured, and the production serial number assigned by the manufacturer to the vehicle. The VIN appears on various parts of the vehicle, such as its fenders, hood and doors.(35)
The currently required methods to affix the VIN allow the number to be easily transferred from one vehicle to another. To correct the problems associated with the alteration and replacement of VINs, the federal Department of Transport has introduced measures, which will enter into effect on 1 September 2008, to ensure that the VIN cannot be removed without damaging or destroying the plate, sticker or vehicle.(36)
With respect to falsification methods using the VIN, the Canadian Crime Intelligence Service recently noted:
The Insurance Crime Prevention Bureau has identified an increase in four main fraud techniques that are used by organized crime to steal vehicles. These include: the illegal transfer of Vehicle Identification Numbers (VINs) from wrecked vehicles to similar ones that have been stolen; a legitimate VIN is used to change the legal identity of a stolen vehicle of the same make, model, and colour, a process called “twinning.”(37)
At present, the Criminal Code deals only with the possession of property obtained by crime.(38) The bill adds two offences to the Code: trafficking (new s. 355.2) and possession of property obtained by crime for the purpose of trafficking (new s. 355.4).
As in the case of possession of property obtained by crime, the property must have been derived from the commission of an indictable offence in Canada or outside Canada. In addition to proving criminal origin, the prosecution will also have to prove, beyond a reasonable doubt, that the accused had knowledge of the criminal origin.(39) Also, as in the case of possession of property obtained by crime and laundering proceeds of crime,(40) the Attorney General of Canada can conduct proceedings in respect of the two new offences created by the bill (clause 3).
The definition of “traffic” (new s. 355.1 of the Code) covers a wide range of activities, including selling, offering and delivering, as well as exporting and importing. The new offences may therefore apply to all intermediaries who are involved in the movement of property obtained by crime.(41)
New section 355.5 of the Code provides that the two new offences are indictable offences (if the value of the property is more than $5,000) or hybrid offences, which means that the prosecution may elect to proceed by indictment or by way of summary conviction (if the value of the property is $5,000 or less). Table 1 compares the maximum penalties for the new offences with those for the existing offence of possession of property obtained by crime.
|
Existing offence in the Criminal Code
|
Offences in the bill
|
|||
|---|---|---|---|---|
|
Value of the property
|
Method of prosecution
|
Possession of property
obtained by crime |
Trafficking
in property obtained by crime |
Possession of property obtained by crime for the purpose of trafficking
|
|
> $5,000
|
Indictment
|
10 years
|
14 years
|
|
|
≤ $5,000
|
Indictment
|
2 years
|
5 years
|
|
|
Summary conviction
|
6 months and/or $2,000 fine
|
6 months and/or $2,000 fine
|
||
The Customs Act(42) authorizes the CBSA to seize goods whose the importation or exportation is prohibited under an Act of Parliament. At present, however, there is no federal legislation that prohibits the importation or exportation of property obtained by crime.(43)
The bill prohibits the importation and exportation of property obtained by crime (new s. 355.3 of the Code). This means that CBSA officers will be able to examine, seize and forfeit property obtained by crime that is imported or destined for exportation.
In addition, the Reporting of Exported Goods Regulations(44) were amended in 2005 to require that VINs be reported for conveyances permanently exported from Canada. The purpose of that amendment was to allow CBSA officers to examine containers destined for export in order to identify stolen vehicles.(45)
Currently, a person who alters a VIN in order to conceal the identity of a stolen vehicle is often charged with possession of property obtained by crime or an offence under other theft-related provisions. The Criminal Code deals specifically with VINs in subsection 354(2), which provides, in the context of an offence under subsection 354(1), for the assumption that if the VIN has been altered, the vehicle was stolen.(46) However, a person does not commit an offence as such by altering the VIN.
The bill makes it an offence to alter, remove or obliterate a VIN(47) (new subs. 377.1(1) of the Code.). The VIN is defined in terms that are similar to those used for the offence of possession of property obtained by crime (new subs. 377.1(2) of the Code).(48) An additional tool is thus made available to law enforcement agencies to enable them to lay charges in cases of theft, defacement and resale of motor vehicles.
In the terms used in the bill, the new offence applies to an accused who “wholly or partially, alters, removes or obliterates a vehicle identification number on a motor vehicle.” Since criminal organizations often dismantle stolen vehicles, it might be asked whether it would not be prudent to add the phrase “or on a part thereof” or a similar expression.(49)
The previous bill C-64 provided that the prosecution had to prove that the VIN had been altered “under circumstances that give rise to a reasonable inference that the person did so to conceal the identity of the motor vehicle.” The same offence in Bill C‑53 does not include that last phrase. However, Bill C-53 expressly provides that lawful conduct, such as regular maintenance of the vehicle, body work and auto recycling or wrecking, is a valid defence (new subs. 377.1(3) of the Code).
Under new subsection 377.1(4) of the Code, altering, removing or obliterating a VIN is a hybrid offence. Subsection 377.1(4) provides for a maximum sentence of imprisonment for five years in the case of an indictable offence. If the prosecution decides to proceed by way of summary conviction instead, the offence is punishable by a $2,000 fine and imprisonment for six months, or both.(50) These are the same sentences as were provided for in the previous Bill C‑64.
Because the offence of altering a VIN is punishable by imprisonment for a maximum of five years, it falls into the “serious offence” category. If such an offence is repeatedly committed by a group of three or more persons, it may be considered to be an offence committed by a “criminal organization,”(51) with all the consequences that may have for police investigations, prosecutions and sentencing.(52)
Insurance companies believe that Bill C-53 will be effective in combating motor vehicle theft in Canada.(53) More specifically, the Insurance Bureau of Canada has welcomed the provisions giving express power to Canada Border Services Agency officers to prevent cross-border movement of property obtained by crime.(54) It believes that the present uncertainty is exploited by criminal organizations.
Others believe that the bill is only a partial solution to the major auto theft problem in Canada.(55) Because the proposed measures primarily target vehicle theft by criminal organizations, they do not apply to a majority of thefts.(56) Four out of five thefts do not involve criminal organizations.(57)
The bill’s provisions will therefore be useful only in major urban centres where criminal organizations are well established, such as Montréal, Toronto and Vancouver. (58) They will not be useful in other parts of the country where, as in Winnipeg, according to police chief Keith McCaskill, a majority of auto thefts are committed by people who want to take an impromptu ride and do not intend to resell the vehicle.(59) To deal with that problem, Sam Katz, Mayor of Winnipeg, would prefer to see tougher sentences for auto theft, both for adults and for young offenders.(60)
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