A. Use of Administrative Monetary Penalties

1. Background and Discussion

Administrative monetary penalties (AMPs) are typically penalties where the regulator imposes a monetary penalty that is subject only to administrative review.[33] There are a number of AMP regimes in Ontario and AMP systems are thought to be less expensive than the regulatory offence regime.[34] An important example of an AMP regime is found in the Municipal Act, 2001.

On January 1, 2007, the Municipal Statute Law Amendment Act, 2006[35]came into force and made a number of significant changes to the Municipal Act, 2001. One of those changes was the addition of s. 102.1 to the Municipal Act, 2001, which gives municipalities the authority to require a person to pay an administrative penalty where the municipality is satisfied that the person has failed to comply with a by-law respecting the parking, standing or stopping of vehicles.[36]

Under the provisions of the Municipal Act, 2001, the decision to create an AMP system is with the municipality. If a municipality chooses to set up an AMP system for a parking violation, the POA no longer applies to that violation.[37]

The municipal power to require a person to pay an administrative penalty is subject to the Lieutenant Governor in Council making a regulation under subsection 102.1(3) of the Municipal Act, 2001. O. Reg. 333/07 has been made pursuant to this authority and allows for the creation of an administrative penalty system provided that certain requirements in the regulation are met.

Section 3 of O. Reg. 333/07 states that a municipality shall not exercise the authority under s. 102.1 of the Municipal Act, 2001 to utilize administrative penalties unless it passes a by-law establishing a system of administrative penalties that meets the requirements of O. Reg. 333/07, it designates the by-laws, or parts of such by-laws, as one to which the system of administrative penalties applies, and it has met all other requirements of the regulation.

O. Reg. 333/07 creates rules dealing with monetary limits for administrative penalties. The monetary limit of an administrative penalty under the scheme is set out in section 6 of the regulation:

The amount of an administrative penalty established by a municipality,

(a) shall not be punitive in nature;

(b) shall not exceed the amount reasonably required to promote compliance with a designated by-law; and

(c) shall not exceed $100.

It also creates rules dealing with the administration of the administrative penalty system, procedural requirements that must be included in any administrative penalty by-law, enforcement (including plate denial), administrative fees and the requirement for making administrative penalty by-laws public.

In summary, this regime tries to create a system that improves efficiency while still respecting the requirements of natural justice through the imposition of standards in the regulation. The LCO is not aware of any municipalities that have created an AMP system for parking infractions, though some municipalities, such as Oshawa, have AMP systems to deal with non-compliance with other types of municipal by-laws passed pursuant to the Municipal Act, 2001.[38]

The option to use AMPs for parking infractions, the use of AMPs in other contexts and the argument that AMP systems are a better use of resources raises the possibility of extending their application to other provincial offences. For example, there are large numbers of speeding charges and many of them end up being contested in court. Some of the leading thinkers on regulatory law in Canada have advocated making minor speeding violations (e.g. speeding violations of exceeding the speed limit by less than 16 kilometers[39]) subject to an AMP:

Resource considerations suggest that for minor provincial offences, we ought not to use our courts at all. Minor speeding offences are a perfect subject for administrative monetary penalties. In our view, the present practice of utilizing courts presided over by justices of the peace to adjudicate on minor speeding offences, may not make great practical sense. Moreover, the practice is inconsistent with the move towards administrative monetary penalties in other sectors, such as the environment.[40]

Similarly, AMPs could be extended to other minor offences. If so, should high-volume minor offences be targeted or are other qualities more important for determining which violations should be subject to AMPs?

The extended use of AMPs raises the question of whether the AMP system should be the only system available or whether the POA should continue to apply where there is an AMP option. Currently, there are different answers to that question. For example, subsection 182.1(11) of the Environmental Protection Act states that a person may be charged, prosecuted and convicted of an offence under the Act even if that person or another person has paid an environmental penalty (a type of administrative penalty) for that same contravention.[41] On the other hand, where a municipality chooses to implement an AMP system for parking violations, the POA no longer applies.

2. Questions

A(1) (a) Should the municipalities be required to establish a system of administrative monetary penalties for enforcing by-laws respecting parking, standing or stopping of vehicles?

(b) If so, what should happen to the option to prosecute such offences under Part II of the POA?

(c) If there were no option to prosecute under Part II of the POA, are there any steps that could be taken to facilitate the move from Part II to an AMP system?

A(2) (a) Should AMPs be available for other provincial offences?

(b) If so, which offences should be the priority?

(c) If so, what should happen to the option to prosecute such offences under Part I of the POA?

B. Classification of Offences

1. Background and Discussion

In R. v. Sault Ste Marie, the Supreme Court of Canada held that there are three categories of regulatory offences. The categories of offences are offences in which mens rea must be proved, offences of strict liability and offences of absolute liability. [42]

The first category of offences requires the prosecution to prove mens rea, which consists of a positive state of mind such as intent, knowledge or recklessness. In addition, the prosecution must prove beyond a reasonable doubt that the defendant committed the prohibited act.

The second category of offences that the court established is strict liability offences. For strict liability offences the prosecution must prove beyond a reasonable doubt that the defendant committed the prohibited act, but it does not have to prove mens rea. The defendant can avoid liability by showing on a balance of probabilities that he/she took all reasonable care. The defence of reasonable care involves a consideration of what the reasonable person would do, and is available if the defendant reasonably believed in a mistaken set of facts which, if true, would render the act or omission innocent, or if the defendant took all reasonable steps to avoid the particular event.

The third category of offences created by the court is that of absolute liability offences. As in strict liability offences, for absolute liability offences the prosecution must only prove beyond a reasonable doubt that the defendant committed the prohibited act. Unlike strict liability though, it is not open to the defendant to show that reasonable care was taken.[43]

The court went on to hold that public welfare offences would prima facie fall into the second category of strict liability offences. A public welfare offence would only be a mens rea offence where the statutory provision creating the offence used such words as “willfully”, “with intent”, “knowingly” or “intentionally”. In addition, offences would only be absolute liability where “the legislature had made it clear that guilt would follow proof merely of the proscribed act.”[44] To determine whether an offence is absolute liability, the primary considerations are the overall regulatory pattern adopted by the legislature, the subject matter of the legislation, the importance of the penalty and precision of the language used.

Despite the enunciation of this test, the classification of regulatory offences continues to take up court time. Recent cases such as R. v. Felderhof[45] illustrate that valuable court time and resources are still being used to classify the offence in question. Further, there are numerous cases where the same or almost identical offences have been classified differently by different courts. In Brampton (City) v. Kanda[46], the defendant driver was charged with failing to ensure that a passenger wore the complete seatbelt assembly contrary to s. 106(6) of the Highway Traffic Act.[47] The trial judge held that the offence was absolute liability and convicted the defendant. On appeal to the summary conviction appeal judge, the offence was found to be one of strict liability. On further appeal, the Ontario Court of Appeal agreed with the appeal judge that the offence was a strict liability offence.

More effective use of court resources and predictability might be met if the POA contained a provision that would deal with the classification of provincial offences. For example, the POA could provide that an offence is a strict liability offence unless: (a) the offence provision explicitly states that it is an absolute liability offence; or (b) the offence provision expressly uses language importing mens rea such as “knowingly”, “intentionally”, “maliciously”, “willfully” “recklessly”, “without lawful excuse” or other similar words.[48]

2. Questions

B(1) (a) Should the POA contain a provision setting out how to determine the classification of an offence as an absolute liability offence, a strict liability offence or a mens rea offence?

(b) If so, what should the substance of that provision be?

C. Sentencing

1. Background and Discussion

The POA does not contain a statement of the purpose and principles applicable to the sentencing of offences to which it applies. This is in contrast to sections 718 to 718.2 of the Criminal Code which set out the purpose and principles that are applicable to the sentencing of a person convicted of a criminal offence. Section 718.21 sets out additional factors that a court is to take into account when sentencing an organization. British Columbia’s Public Health Act[49] also contains a statement of sentencing principles for offences committed under that Act.

It has been argued that in order for sentencing to be legitimate, it must be based “on a consistent and principled approach that aligns that part of the regulatory process with the underlying regulatory goals”[50] While the courts have identified over 20 principles applicable to regulatory offences,[51] the approach has not always been consistent and it is not clear how the principles relate and which, if any, take precedence.[52]

Numerous writers have advocated the inclusion of sentencing principles and additional sentencing options in regulatory acts.[53] In designing such provisions for regulatory legislation, it has been argued that a number of factors should be considered.

First, it should be remembered that the sentencing of regulatory offences is part of a cycle that does not typically end with sentencing. Normally the convicted person will continue to carry out the regulated activity, and for that matter, society usually has an interest in the person continuing to provide goods and services and employment.[54]

Second, regulatory standards are moving away from being design-based. Design-based regulations identify how an act is to be carried out (e.g. an operator must install a number 2 scrubber) and are clear. However, design-based regulations have been criticized as being slow to adapt to changing technology and expertise which may lead to impaired efficiency and innovation.[55] Newer regulatory strategies include outcome-based, performance-based and principles-based regulations. These types of regulations can be distinguished as follows:

1. Outcome-based regulations provide for a measurable result to be achieved (e.g. an operator must ensure that emissions from a stack contain less than x parts per million of nitrous oxide);

2. Performance-based regulations provide for a non-measurable result to be achieved (e.g. an operator must ensure that emissions do not contain nitrous oxide in amounts that cause an adverse effect on the environment); and

3. Principles-based regulations establish standards of conduct (e.g. the operator must dispose of a dead farm animal in a manner that is environmentally sound).[56]

While the newer strategies provide regulated persons with more operational flexibility, the latter two can also create more uncertainty around what the obligation of the regulated person is. The obligation to install a particular scrubber is less flexible, but it may also be a more clear obligation than ensuring that the operation is run in an environmentally sound manner. If that is so, it has been argued that sentencing should be used to help an offender determine and comply with standards in the future.[57]

Third, the movement away from design-based regulation has been accompanied by a less adversarial approach to enforcement. Since the above-cited trend may lead to less certainty about whether an offence has been committed, warnings and more cooperative approaches such as negotiation are often used before investigation and prosecution. Sentencing has to consider past attempts at compliance as well as the future relationship between the regulator and the regulated person.[58]

One model that attempts to respond to these factors is that advocated by Sherie Verhulst. She writes that a court should move through the following five steps in sentencing a provincial offence:

(1) encourage joint submissions on aggravating and mitigating factors and the sanctions