The federal government has heard the pleas of fraud victims, but simply seeking stiffer sentences for offenders is not the answer. More resources to tackle financial crime, along with greater efforts to secure restitution, are what’s really needed to fight the scourge of fraud.

There’s no question that Canada has a reputation for being soft on white-collar criminals. Cases typically take years to come to trial, if at all. And when there is a conviction, the penalty often seems insufficient, given the offence. Meanwhile, the victims of financial crime often report that their lives are shattered.

Not only is this unjust, but the apparent lack of serious consequences for white-collar criminals in Canada doesn’t provide much deterrent. These are not crimes of passion. The people who make fraud their living deliberately plan their schemes and shop for friendly jurisdictions in which to carry them out. Canada must become much less accommodating to these sorts of schemes — and their perpetrators.

To its credit, Ottawa is promising to introduce legislation in
the current session of Parliament to impose tougher sentences on convicted fraudsters.

It’s certainly good news that the government is paying attention to this problem. But it’s far from clear that simply seeking tougher sentences is going to solve anything.

Although it won’t hurt to make the penalties for fraud harsher, it’s the likelihood of being caught and punished that really needs to change if we are to alter fundamentally the cost/benefit analysis by prospective fraud artists. That means committing resources to the apprehension and prosecution of financial criminals. Change the calculus of the fraudster, and you can reduce the appeal of their crimes.

Additionally, courts should be doing more to undo the harm inflicted in these cases by seeking restitution for victims. That’s not likely to have any deterrent effect, nor will it be possible in many cases, but it is nonetheless something that the authorities should try to do in appropriate situations.

The government has pledged to include easier access to restitution in its forthcoming reforms. If that is coupled with a more convincing commitment to policing and prosecution, Canada may yet shed its reputation as a safe haven for financial crime.