New proposed legislation designed to crack down on white-collar crime might not deter potential fraudsters and could limit judges' ability to impose appropriate sentences, critics of the bill suggest.

Justice Minister Rob Nicholson outlined a bill Tuesday that seeks to impose mandatory minimum two-year jail terms for anyone convicted of bilking victims of more than $1 million.

The new legislation would also give judges the ability to order restitution to victims of crime and bar white-collar criminals for life from handling people's money.

"Tying the hands of judges in this way essentially sends the message that we think judges are too stupid to make appropriate decisions," said Stephen Jenuth, a defence lawyer.

Duff Conacher, a co-ordinator for Democracy Watch, said that the U.S. experience shows that high penalties do not decrease the rate of corporate crime, even in countries with a national securities commission.

"The regulators either don't have the resources or the tough enforcement attitude to have a high chance of catching fraudsters," Conacher said.

But Gordon Sick, a finance professor at the University of Calgary, said he thought most Canadians would support the proposed changes.

"I would imagine if I was a relative of one of the people who'd been done in by one of the Ponzi schemes, I'd be hoping my legislators would be doing something about that," Sick said.

Tougher sentences needed, victim says

Calgary resident Doreen Brown wants the government to impose even tougher minimum sentences than proposed in the new bill.

Alberta resident Doreen Brown says she lost $50,000 to white-collar criminals. (CBC)She lost roughly $50,000 after investing in what police have called Alberta's largest Ponzi scheme. She thought she was investing her retirement savings in a legitimate mining company but later found out her savings were gone.

Police allege that Milowe Brost, 55, and Gary Sorenson, 66, bilked about 4,000 investors out of up to $400 million.

The proposed bill also includes several new "aggravating factors" for judges to consider when sentencing, including the financial and psychological impact of the crime; the age, health and financial situation of the victims; and whether the fraudster concealed or destroyed records.

With files from The Canadian Press