Horizontal Initiative – Integrated Market Enforcement Teams (IMET) Program

Name of Horizontal Initiative: Integrated Market Enforcement Teams (IMET) Program

Name of Lead Department: Public Safety Canada

Lead Department Program Activity: Countering Crime

Start Date: 2003-04

End Date: 2012-13 and Ongoing

Total Federal Funding Allocation (from start date to end date):  $302,599,000 from 2003-04 through 2012-13 and $36,800,000 ongoing*
*All numbers include the employee benefits plans (EBP) and Public Works and Government Services Canada (PWGSC) accommodation costs.

Description of the Horizontal Initiative (including funding agreement): The objective of the IMET program is to effectively enforce the law against serious criminal capital market fraud offences in Canada. To achieve this objective, IMET is mandated to investigate serious Criminal Code capital market fraud offences that are of regional or national significance and threaten investor confidence or economic stability in Canada.

Shared Outcome: Improved Canadian and international investor confidence in the integrity of Canada’s capital markets.

Governance Structure: The IMET Executive Council is composed of senior officials from the Royal Canadian Mounted Police (co-chair), Department of Finance (co-chair), the Office of the Director of Public Prosecutions, Department of Justice and Public Safety Canada. It provides strategic oversight for the IMET program.

Performance Highlights: The IMET partners examined options to improve and enhance the efficiency and effectiveness of investigations and prosecutions to address serious and complex fraud that occurs in Canada's capital markets.

Federal Partners

Federal Partner Program Activity

Names of Programs for Federal Partners

Total Allocation
(FY 2003-04 to 2012-13 and Ongoing)
(in dollars)

2014-15 (in dollars)

Planned spending

Actual spending

Expected results

Contributing activity/
program results (using specific indicators)

Public Safety Canada

Countering Crime

IMET

FY 2003-04 to FY 2007-08: $1,125,000

FY 2008-09 to FY 2012-13: $1,703,290

(Ongoing: $340,658)

$340,658

$199,145

Fulfillment of Public Safety Canada's IMET program management responsibilities, including coordinating reporting, evaluations, policy development and research.

Public Safety Canada supported the development of options to address the recommendations of the Ministerial Expert Panel.

The Department provided leadership and policy advice on the strategic objectives of the IMET program.

Internal Services

IMET

FY 2008-09 to FY 2012-13: $590,660

(Ongoing: $68,132)

$198,132

$68,132

The variance in the planned spending can be explained by the cost of program evaluation.

Supported the work of the program by providing key corporate services.

Royal Canadian Mounted Police

Federal and International Operations

IMET

FY 2003-04 to FY 2007-08: $74,000,000

FY 2008-09 to FY 2012-13: $154,584,010

(Ongoing: $30,968,817^Footnote1)

$30,968,817

$24,146,700

The RCMP's IMET Program continues to be intelligence led, pro-active and strives to ensure continued confidence in the Canadian Capital Markets. It will perform its prevention and investigation responsibilities, including the operations of coordinated securities intelligence units (SIU's), investigative teams and headquarters support, by leveraging pooled resources at the Division and National levels.

Over the past year, the RCMP has continued to move forward with its “new model” wherein RCMP IMET teams will seek closer cooperation with key partners including but not limited to the Provincial Securities Commissions and law enforcement of local jurisdiction. One key benefit of this “new model” is that it will allow each of the partners working on IMET to utilize the expertise of the others. For example, Securities Commissions employ Forensic Accountants and other experts that the RCMP may or may not have within a given region.  In addition, Securities Commissions have the option of pursuing additional avenues that will help disrupt capital market offenders through regulatory means that are not accessible to the RCMP. 

In the Greater Toronto Area (GTA), the RCMP IMET team has allocated some of its staff members to the Ontario Securities Commission's (OSC) building. This will allow more consultation between the agencies when deciding which cases to pursue and how to investigate them. The IMET OSC integration and co-location allowed the creation and implementation of an environment supporting a truly integrated partnership where all partners (including police partners) collaboratively set priorities and share resources based on capacity and capabilities.  In addition, co-location of all partners in one premise facilitated the timely exchange of information and will assist in identifying issues before they become more serious problems. Over the coming year, the RCMP will seek to implement this ‘new model’ in Alberta and British Columbia. Consultations with Provincial Securities Commissions in these provinces have already begun and there is strong support for pursuing closer integration.  In Quebec, a similar model to the one implemented in Toronto already exists but work is ongoing to ensure that the Securities Commission and the RCMP are more closely aligned. 

Results from Ontario have already demonstrated success.  Closer co-ordination with the OSC comes two years after the OSC launched a smaller joint serious offences team (JSOT) in co-operation with the RCMP and the Ontario Provincial Police, allowing the regulator to lay more fraud charges in court using the criminal powers of its partners. While the OSC and IMET will remain separately run organizations, the success of JSOT has proved the regulators and the IMET teams can work together efficiently.

IMET teams have focused enforcement efforts around investigations related to sections in Part X of the Criminal Code that include Fraud, Fraud Affecting Public Market, Fraudulent Manipulation of Stock Exchange Transactions, and False Prospectus.

Office of the Director of Public Prosecutions

Regulatory Offences and Economic Crime Prosecution Program

IMET

FY 2003-04 to
FY 2007-08: $3,750,000^Footnote2

FY 2008-09 to
FY 2012-13: $29,266,685

(Ongoing: $4,353,337^Footnote3

$4,353,337

$3,233,225

Provision of pre-charge legal advice and litigation support, as well as prosecution of serious capital market fraud offences under the Criminal Code in response to the workload generated by the IMETs.

Over the course of 2014-15, the ODPP dedicated a total of 16,928 hours to IMET-related activities, including the provision of legal advice and litigation support, prosecution services as well as management and administrative support.
ODPP counsel participated in four IMET-related prosecutions, three in Montreal and one in Halifax. In addition, ODPP advisors regularly provided legal assistance throughout the investigations.

Department of Justice

Justice, Policies, Laws and Programs

IMET

FY 2003-04 to
FY 2007-08: $26,674,000

FY 2008-09 to
FY 2012-13: $9,075,780

(Ongoing: $705,156^Footnote4

$705,156

$87,756

Market fraud cases are effectively prosecuted in order to maintain confidence in Canadian capital markets.

The object of the IMETs Reserve Fund is to assist Provincial Attorneys General by defraying certain prosecution related costs arising from IMET investigations. In 2014-15, no applications for funding were received.

Services to Government

IMET

FY 2008-09 to
FY 2012-13:
$844,110

(Ongoing: $168,822)

$193,068

$202,376

The International Assistance Group (IAG) provides legal advice on international assistance requests and coordinates all IMET requests to and from foreign countries. Once a request for mutual legal assistance has been executed, it is the responsibility of the RCMP, not the IAG, to monitor the outcome of the relevant investigation or prosecution for which the evidence was gathered.

The International Assistance Group (IAG) provided legal advice on international assistance requests and coordinated all IMET requests to and from foreign countries, including:

• assisted IMET personnel in the preparation of all outgoing MLA requests;
• liaised regularly with IMET headquarters and IMET regional offices;
• provided legal advice and assistance in the area of MLA to IMET headquarters and IMET regional offices (Montreal, Toronto, Calgary and Vancouver) with respect to current and potential MLA requests;
• reviewed and approved IMET MLA requests;
• transmitted IMET’s outgoing MLA requests to the central authority of the requested state;
• followed-up with IMET personnel and foreign central authorities to ensure that all IMET MLA requests were executed in accordance with the treaty and the terms of the request;
• assisted in the gathering of evidence of all outgoing MLA original and supplemental requests in relation to IMET investigations;
• reviewed all incoming IMET MLA requests to ensure that they met the relevant treaty and Canadian legal requirements;
• prepared monthly IMET MLA status reports that were provided to IMET headquarters and IMET regional offices; and
• met quarterly with IMET headquarters and PPSC and provided legal advice in the areas of current and potential MLA requests.

Internal Services

IMET

FY 2008-09 to
FY 2012-13:
$113,425

(Ongoing: $22,685)

$22,685

$22,685

Provision of program support.

Supported the work of the program by providing key corporate services.

Finance Canada

Economic and Fiscal Policy Framework

IMET

FY 2008-09 to
FY 2012-13:
$872,040

(Ongoing: $172,393)

$172,393

$ 172,393

As Co-Chair of the IMET Executive Council and the Interdepartmental Working Group, Finance Canada is to provide strategic direction to the IMET program that reflects the Government of Canada's broader capital markets agenda. Finance Canada is to provide leadership in engaging external stakeholders in efforts to enhance program performance, including opportunities to strengthen the continuum of enforcement.

Through its role as Co-Chair of the Executive Council and Interdepartmental Working Group, Finance Canada provided leadership and advice on the strategic direction of the IMET program, as well as facilitated collaboration between external stakeholders and program partners.

Total Allocation for all Federal Partners
(from 2003-04 to 2012-13 and ongoing)

$302,599,000

(Ongoing: 36,800,000)

$36,954,246

$28,132,412

Comments on Variances:
Public Safety Canada:
The variance in the planned spending can be explained by the deferral of a planned program evaluation.

Royal Canadian Mounted Police:  The variance in 2014/15 is largely the result of changing operational priorities within the Federal Policing program. These priorities primarily related to National Security following the events on Parliament Hill in October 2014. Resources were reallocated to support national security criminal investigations, including high‐risk travellers and high‐risk individuals and other national security threats.

Office of the Director of Public Prosecutions:
The decrease of $1.2M from planned spending to actual spending is due to the fact that the ODPP had participated in only two significant prosecutions.  These prosecutions did not require the use of all the funding that had originally been allocated. 

Justice Canada:

• Stewardship of the Canadian Legal Framework: The variance reported between planned spending and actual spending in fiscal year 2014-15 reflects, in Vote 1 (operating expenditures), the conversion of operation and maintenance (O&M) to salary to support the Ministerial Expert Panel, the program administration and corporate costs, and as for the Vote 5 (Grants and Contributions), reflects the zero number of applications received under the Fund.
• Legal Services to Government Program: The variance in the planned spending can be explained by an increase in salary and related pay benefits.

Results achieved by non-federal partners (if applicable): N/A

Contact information:
Name: Trevor Bhupsingh
Title: Director General, Law Enforcement and Border Strategies, Public Safety Canada
Telephone: (613) 991-4281
Email: trevor.bhupsingh@ps-sp.gc.ca