Aug. 4 (Bloomberg) -- Canada should form a national enforcement agency to accelerate fraud cases such as Livent Inc., said David Denison, chairman of the Canadian Coalition for Good Governance.

“Our record in Canada is abysmal,” Denison said today in an interview in Toronto. “In the U.S. there’s at least a sense of urgency around dealing with these issues.”

Denison cited Livent, the defunct theater producer founded by Garth Drabinsky and Myron Gottlieb, as an example of an “unduly long” process. The partners will be sentenced tomorrow for fraud and forgery, more than 10 years after police began investigating what they called one of the biggest fraud cases in Canadian history.

“It just takes too long to deal with these white-collar criminal issues,” said Denison, who became chairman for the Canadian group on July 13.

The coalition of pension funds and money managers, with about C$1.2 trillion ($1.1 trillion) under management, is calling for better enforcement in Canada to tackle fraud and other corporate crimes. Denison advocates a Canadian enforcement body that would have the resources and jurisdiction to tackle such crimes. He also calls for a single court that specializes in white-collar crimes, overseen by judges with such expertise.

“It’s our view that the effective enforcement will help minimize the instances that we’re seeing in Canada,” said Denison, who also cited Bre-X Minerals Ltd., whose shares became worthless in early 1997 when the Calgary-based company’s claim of having a gold reserve in Indonesia proved to be a hoax.

Quebec Cases

“We’re seeing some cases of adviser fraud now in Quebec,” said Denison, who’s also the chief executive officer of Canada Pension Plan Investment Board, the country’s second-biggest pension fund. “We’ll see how long those take, but if it’s based on past results, it’ll be a terribly long process.”

Quebec investigators looking into fraud allegations against Earl Jones in Montreal found less than 1 percent of the C$90 million he claimed to manage at his firm, which last week declared bankruptcy.

The coalition also plans to meet board members of 25 Canadian companies this year to discuss executive compensation, including 13 firms that agreed to “Say on Pay” shareholder proposals. The group will target Canada’s six-biggest banks first, with meetings in September and October, Denison said.

The group wants bonuses to be tied more to performance and less on share price. A surge in stock and commodities prices can drive up a company’s shares regardless of performance, he said.

Pay for Performance

“People are getting rewarded for the broad market performance, they’re not getting rewarded for value-added performance,” Denison said. “If a company underperforms, we’d like that to get reflected in the stock-based compensation, and we don’t see that.”

Companies should adopt measures similar to those at Canadian pension funds, which use industry benchmarks such as indexes to compare performance.

“The way compensation works at the large pension funds in Canada is exactly what we would like to see in corporations,” Denison said. We want companies to “deemphasize short-term results, and think about the long term. That’s what benefits shareholders.”

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

Last Updated: August 4, 2009 16:35 EDT