I. FRAMING THE PROBLEM2017-03-03T18:35:01+00:00

A. Regulatory Offences and Sentencing Provisions

 

1. Introduction

 

Regulatory offences correspond to an incredibly diverse and complex series of activities. Indeed, one of the challenges that emerges for courts when imposing a penalty for the commission of a regulatory offence, is the breadth of the type of activity and conduct that may comprise the infraction. Whereas the Criminal Code of Canada includes a statement of sentencing purposes and principles to guide courts in determining punishment, there is no such guidance provided to courts sentencing those who commit regulatory offences. The consequences of the lack of statutory guidance are illustrated, in summary form, in this Part, by a matrix of regulatory offences in the area of workplace safety, consumer protection and environmental protection: regulatory agency sentencing patterns are of relevance in gauging the need for consistency and uniformity in the area of sentencing for regulatory offences generally.

 

It has been left to the courts to fill in the gaps, with respect to the purposes and principles of sentencing for regulatory offences, when faced with this bewildering array of regulatory offences, enforcement mechanisms and penalty provisions. What is lacking, however, is a consistent and rational approach. This requires, in turn, the identification and organization of sentencing purposes and principles for regulatory offences. Consideration must first be given to the nature of regulatory offences themselves, and how they not only differ, conceptually, from criminal offences, but also from each other.

 

2. Overview of Regulatory Offences, Enforcement Mechanisms and Penalty Provisions

 

The words of Justice Cory in R. v. Wholesale Travel Group Inc.[11] describing the pervasive nature of regulatory offences in our society are well known. He stated that it would be difficult to think of an aspect of our lives that is not regulated for our benefit and for the protection of society as a whole. To this he added:

 

From cradle to grave, we are protected by regulations; they apply to the doctors attending our entry into this world and to the morticians present at our departure. Every day, from waking to sleeping, we profit from regulatory measures which we often take for granted. On rising, we use various forms of energy whose safe distribution and use are governed by regulation. The trains, buses and other vehicles that get us to work are regulated for our safety. The food we eat and the beverages we drink are subject to regulation for the protection of our health.

 

In short, regulation is absolutely essential for our protection and well being as individuals, and for the effective functioning of society. It is properly present throughout our lives. The more complex the activity, the greater the need for and the greater our reliance upon regulation and its enforcement. For example, most people would have no idea what regulations are required for air transport or how they should be enforced. Of necessity, society relies on government regulation for its safety.[12] 

 

Regulatory offences thus correspond to an incredibly diverse and complex series of activities. Sayre, in 1933, classified regulatory offences into these eight categories: (1) illegal sales of intoxicating liquor (2) sales of impure or adulterated food or drugs (3) sales of misbranded articles (4) violations of anti-narcotic acts (5) criminal nuisances (consisting of annoyances or injuries to public health, safety, repose or comfort; obstructions of highways) (6) violations of traffic regulations (7) violations of motor vehicle laws (8) violations of general police regulations, passed for the safety, health, or well-being of the community.[13]

 

The methods of regulation are themselves varied, and often do not necessitate the involvement of the criminal or quasi-criminal law. [14] Indeed, the majority of “regulatory action” may involve attempts to secure compliance through persuasive efforts.[15] Regulation by prosecution if necessary, but not necessarily prosecution, it might be said.[16]

 

However, regulatory schemes can be effective, ultimately, only where they provide for “significant penalties in the event of their breach” and “strong sanctions”, to return to the words of Cory J. in the Wholesale Travel Group Inc. case.[17] In a subsequent Supreme Court of Canada decision, it was observed that any regulatory statute which lacked prohibitions and penalties would be “meaningless.”[18] After all, what would be the point in having “sophisticated codes of regulation” in the absence of provision being made for their enforcement?[19] In response to this question, it has been stated:

 

Enforcement mechanisms exist as an aid to securing the policy objectives which underlie codes of regulation and the mechanism which is common to the vast majority of codes, although it may not be the only mechanism for which provision is made, is the criminal law.[20]

 

Sentencing for the commission of a regulatory offence has been described as “risk management on its head”, that is, it represents a response to the failure of preventing a violation of a regulatory standard that embodies risk assessment.[21] Risk assessment is a “scientific assessment of the true risk” whereas risk management “incorporates non-scientific factors to reach a policy decision.”[22] The scientific assessment of risk may be converted into laws or regulations; the extent of legal enforcement and allocation of resources for enforcement involves risk management.[23] However, it is at the sentencing stage that courts have the opportunity of addressing the regulatory standards which have been set by the legislature.

 

But there is also the potential for either undermining or over-enforcing these regulatory standards: if a penalty that is imposed is overly lenient, such as a nominal fine, this may have the effect of “under-cutting” the legislature’s risk assessment which led to the creation of the violation in the first place; for some it may represent a “license” fee that it is viewed as merely the cost of doing business or engaging in the regulated activity. On the other hand, if the penalty is “too high”, such as a crushing fine, it may not only inhibit business efficiency but also discourage other law-abiding persons from engaging in the activity or remaining active in the field.[24] The example of imposing a fine at either end of these extremes is apt, given that the enforcement of regulatory statutes is achieved by financial penalties to “a very large extent.”[25] A fine is the “primary mechanism” for regulatory and corporate punishment;[26] it is the penalty that is “most commonly invoked.”[27]

 

One of the challenges facing those considering the imposition of a penalty for the commission of a regulatory offence is the breadth of the type of activity and conduct that may comprise the infraction. In a study on strict liability conducted for the Law Reform Commission of Canada in 1974, it was estimated that there were approximately 20,000 regulatory offences in each province plus an additional 20,000 federal offences.[28]  This did not take into account municipal infractions, such as by-law offences. At the same time, there were 700 Criminal Code sections.[29] By 1983, the Department of Justice estimated that there were 97,000 federal regulatory offences.[30] Given these figures, there is no reason to believe that the number of regulatory offences at all levels of government has not continued to increase.[31] It is thus hard to take issue with the Law Reform Commission of Canada’s prediction more than thirty years ago that “the regulatory offence … is here to stay.”[32] 

 

3. The Nature of Regulatory Offences

 

Unlike Criminal Code offences or “true crimes”, which have a fault or moral blameworthiness element, regulatory or public welfare offences do not always involve fault. Negligence may suffice. Sometimes there will be a fault element; other times an absence of fault or absolute liability. In its seminal judgment in which the “half-way” house of strict liability was formally introduced into Canadian jurisprudence for regulatory offences, as a middle ground between fault (mens rea) and absence of fault (absolute liability), the Supreme Court of Canada observed in R. v. Sault Ste. Marie (City)[33] that public welfare offences involve a “shift of emphasis”, from protecting individual interests to protecting social and public interests.

 

Dickson J., rendering the unanimous judgment of the Court in the Sault Ste. Marie case, stated that public welfare offences lie in a field of “conflicting values”: on one hand it is essential for society to maintain through “effective enforcement” high standards of safety and public health so that the potential victims of those who “carry on latently pernicious activities have a strong claim to consideration”; on the other hand, there is a “generally held revulsion against punishment of the morally innocent.” [34]

 

There are three categories of regulatory offences, flowing from the Sault Ste. Marie decision, each of which is distinct in nature. They were enumerated by Justice Dickson as follows: (1) mens rea offences – these offences consist of “some positive state of mind”, such as intent, knowledge or recklessness, and must be proven by the prosecution either as an inference from the nature of the act committed, or by additional evidence; (2) strict liability offences – for these offences the prosecution is not required to prove mens rea, as the doing of the prohibited act prima facie imports the offence, leaving it open to the defendant to prove, on a balance of probabilities, that he/she took “all reasonable care”; this defence will be available where the accused person reasonably believed in a mistaken set of facts which, if true, would render the act or omission innocent, or if he/she took “all reasonable steps to avoid the particular event”; (3) absolute liability offences – for these offences, it is not open to the defendant to exculpate himself/herself by showing that he/she was “free of fault”.[35]

 

As can be seen, regulatory or public welfare offences are not only different from criminal offences, they differ conceptually from each other. For some there may be a fault element (mens rea offences); for others fault is not required (absolute liability offences). There is a presumption that public welfare offences fall into the strict liability category: whereas they are not subject to “full means rea”, the principle that punishment generally should not be “inflicted on those without fault” applies. [36]

 

However, while the purpose of penalizing a public welfare or regulatory offence may be different from the purpose of penalizing a crime, “the means, a penalty, and the effect, punishment, remain the same.”[37] Indeed, Glanville Williams has made the observation that “all crimes are, in a sense, public welfare offences,”[38] all of which result from regulation: whether one describes these crimes as regulatory offences, public welfare offences or quasi-criminal offences, they have in common the same procedure for prosecution and kind of punishment as other offences.[39]

 

In the Sault Ste. Marie decision, Dickson J. explained that public welfare offences are not “criminal in any real sense”, but are prohibited in the public interest.[40] While enforced as penal laws through the use of “the machinery of the criminal law”, such offences are “in substance of a civil nature”, and might be regarded as a “branch of administrative law.”[41] However, the fundamental difference between criminal law, as a “system for public communication of values”, as opposed to tort law, which “seeks to balance private benefits and public costs”, becomes particularly important at the sentencing stage.[42] Tort law “prices” whereas the criminal law “prohibits”. Hence, it is on sentencing that courts can draw a line between “enforcement of norms that were intended to price and those intended to prohibit.”[43]

 

The type of activities to which public welfare offences relate were called “everyday matters” by Dickson J.[44] Examples given by the Court in Sault Ste. Marie were traffic infractions, sales of impure food, violations of liquor laws, and the like. The case in question involved water pollution. Regulatory legislation is designed to ensure that “minimum standards” are adhered to in activities ranging from commerce, manufacturing and environmental protection.[45] Regulatory offences are often offences of omission, unlike at common law where most crimes involved “positive acts”.[46] The growth of this distinct category of regulatory offences, which unlike criminal offences, were “punishable without regard to any mental element” dates back to the middle of the nineteenth century in both England and the United States, and typically involved offences such as selling adulterated or impure food, including milk, tobacco and liquor.[47]

 

“Everyday matters”, to use the Sault Ste. Marie phrase, may concern the individual involved, or others implicated by the conduct. A person who discharges a pollutant into a water system may cause harm to himself/herself, or perhaps to others only. There may also be harm to fish and wildlife that inhabit the area. But equally, there may be no discernable harm to anyone until many years later. This is just one example of an offence which can encompass “a wide range of activities, effects and degrees of fault.”[48]

 

4. Overlap of Regulatory Offences and Criminal Offences

 

In some cases, the same “regulatory misconduct” is made the subject of both criminal and civil penalties.[49] The Competition Act[50]  offence of false or misleading advertising, which was the subject of the Wholesale Travel Group Inc. case, was contained in the Criminal Code until 1969 when it was transferred to the Combines Investigation Act.[51]  Recent changes to the Competition Act allow for misleading representations or deceptive marketing practices to be brought under either a criminal or civil track.[52] Indeed, it appears that most matters under the Competition Act are dealt with under the civil track, leaving only the most serious offences to be the subject of a criminal prosecution.[53]

 

Another example of such regulatory overlap is provided by the workplace safety amendments to the Criminal Code, pursuant to Bill C-45, which imposes criminal liability on organizations.[54] This legislation has the effect of potentially criminalizing conduct formerly prosecuted under provincial occupational health and safety legislation by imposing a duty on persons who direct work to take reasonable steps so as to prevent bodily harm to workers and the public arising from such work.[55]

 

In other cases, there are multiple methods of enforcement available to the regulating agency. Under the Ontario Securities Act,[56] for instance, it is open to the Securities Commission to enforce its jurisdiction by means of quasi-criminal proceedings before the Ontario Court of Justice, by way of administrative proceeding for an order in the public interest, or by applying for a declaration in the Superior Court of Justice. These “enforcement tools” have been held to provide the Securities Commission with a “range of remedial options” that can be deployed in its discretion, in order to meet the “wide variety of problems and issues that it must confront.”[57] Further, a charge of “insider trading” might also be prosecuted under the Criminal Code, as opposed to the provincial Securities Act legislation.

 

Under the Ontario Environmental Enforcement Statute Law Amendment Act, 2005,[58] a new regime of administrative penalties has been created, which are absolute liability in nature. The amount of these absolute liability environmental penalties has been set at $100,000 for each day that a contravention occurs. It is also permissible under the legislation to prosecute polluters for “serious spills” in addition to levying an administrative penalty. There are also administrative penalties which flow from Criminal Code charges, such as an administrative driver’s licence suspension which is imposed following charges of drinking and driving.

 

The recourse to such administrative tools of regulatory enforcement that operate outside of the court system is yet another enforcement mechanism. What seems unreasonable to a court may not appear so to a regulator. The opposite is also true. Each represents different institutions with different interests. Regulators are concerned with reaching “practical and administrative results” which help achieve the general public interest goal of the legislation in question.[59] In their role of “expert advisers” rather than “industrial police”, regulators may seek a compromise solution which is acceptable to the groups involved.[60] Those being regulated also play a significant role in the regulation of their own activities, and may be the “best judges of their self-interest”.[61] Conversely, courts of law must act on the basis of the record placed before them, without necessarily all the relevant facts or further factual investigation.[62]

 

5. Regulatory Offences and Statutory Interpretation

 

Whether the public welfare offence being enforced by the regulator is one of mens rea, strict liability or absolute liability, is a question of statutory interpretation.[63] This is the legacy of the Sault Ste. Marie decision, even with the presumption that most public welfare offences fall into the strict liability category. There is an especially “strong presumption” in favour of strict liability in the “interpretive contest” between it and absolute liability.[64]

However, it is open to the legislature to employ all three categories of regulatory offences within the same scheme. In its judgment concerning Ontario’s Highway Traffic Act [65] offence of operating a motor vehicle with a child who is not wearing a seat belt, the Ontario Court of Appeal in R. v. Kanda [66] noted that Part VI of the legislation, in creating numerous “equipment” offences, contained “clear illustrations of all three categories of regulatory offence”.[67] The examples cited by the Court included: the mens rea offence of a parent or guardian of a person under 16 years old authorizing or knowingly permitting the person to operate a bicycle on a highway unless the person is wearing a bicycle helmet;[68] the strict liability offence of having the control or care of a motor vehicle that sounds any bell, horn or other signaling device as to make an unreasonable noise, or permits any unreasonable amount of smoke to escape from the motor vehicle;[69] the absolute liability offence of flying truck wheel from a commercial motor vehicle.[70]

 

The Court’s conclusion in the Kanda case was that the seatbelt offence in question was one of strict liability. This classification of the offence struck the appropriate balance, in the Court’s view, between encouraging drivers to be vigilant about the safety of child passengers in their vehicles, while not punishing those who exercise due diligence as to children’s seat belts. It was noted, though, that the “minor penalty” for the offence pointed towards absolute liability.[71] But this is not always the case. Indeed, the flying truck wheel offence cited by the Court as an example of an absolute liability offence, carries the highest monetary penalty provided in the Highway Traffic Act of Ontario: a fine of up to $50,000. The administrative absolute liability environmental penalty amount of $100,000 per day under the Ontario Environmental Enforcement Act, has previously been noted. Such penalty provisions for absolute liability offences are the antithesis of “minor penalties”.  As Swaigen observes, there is a “lack of rationality” in the regulatory offences classification scheme.[72]

 

The Ontario Court of Appeal’s recent judgment in R. v. Raham,[73] upholding the constitutional validity of the Highway Traffic Act offence of stunt driving or racing, further illustrates the complexities that arise with respect to statutory interpretation and regulatory offences, particularly classifying the nature of the regulatory offence. Whereas the offence of speeding has been held to be absolute liability in nature by appellate courts in Ontario, [74] and in other provinces,[75] it was found in Raham that while the offence of stunt driving or racing could reasonably be interpreted as an absolute liability offence, it was in fact a strict liability offence due to the presumption in favour of a constitutional interpretation. The Court recognized, however, that the prohibited conduct in the case, driving 50 kilometres in excess of the speed limit, was “identical to the conduct prohibited by the offence of speeding.”[76]

 

6. The Recent Trend of Escalating Penalties for Regulatory Offences

 

Neither does it follow that the penalties for regulatory offences generally are invariably less serious than those for Criminal Code offences. Thus the penalty provisions set out in the respective legislation do not necessarily reflect the differences between true crimes and minor offences. Indeed, the general penalty provision in the Provincial Offences Act of Ontario of $5,000[77] has until recently exceeded that for Criminal Code summary conviction offences.[78] Hence, the “simple fact”, as noted by Sherrin, is that “regulatory offences can attract penalties as severe as criminal offences.”[79]  

 

At the time of the Supreme Court of Canada’s judgment in Sault Ste. Marie, which was a pollution case, the highest fine available for most environmental offences was $5,000 or less, with imprisonment being an infrequent option.[80] However, within a span of fifteen years, many federal and provincial environmental laws have been amended to provide for fines in the millions of dollars, substantial terms of imprisonment, and other serious consequences including forfeiture of property, suspension or cancellation of business licences, and clean-up orders.[81]

 

An individual sentenced to a period of imprisonment would find “little comfort”, suggests Don Stuart, in the analysis that the so-called regulatory offence of misleading advertising, which carries a maximum sentence of five years’ imprisonment, is not criminal.[82] After all, “A person whose liberty has been restricted by way of imprisonment has lost no less liberty because he or she is being punished for the commission of a regulatory offence as opposed to a criminal offence. Jail is jail, whatever the reason for it,” as Chief Justice Lamer put it in his dissenting opinion in Wholesale Travel Group Inc. [83] For this reason, many commentators have suggested that the focus is better spent on the penalty being sought by the state, and not in seeking to distinguish between the nature of regulatory offences and true crimes.[84]

 

In a Charter of Rights[85] decision where the Supreme Court of Canada unanimously agreed that a justice of the peace conducting a trial for a regulatory offence possesses jurisdiction to grant Charter remedies as a “court of competent jurisdiction”, the Court noted that while many prosecutions under provincial offences legislation involve “minor regulatory infractions”, claims for Charter relief generally arise from prosecutions involving “significant fines and the possibility of imprisonment.”[86]  In such cases, the Court reasoned, the distinction between provincial courts operating under the Criminal Code and provincial offences legislation is far less material. Indeed, the maximum sentence faced by the individual defendant in the instant case, for an offence under the Ontario Occupational Health and Safety Act, [87] of failing to comply with safety requirements on a construction project, was a fine of $25,000 and/or 12 months’ imprisonment. These penalties far exceed those generally available for most Criminal Code summary conviction offences.

 

Many other examples of substantial regulatory offences penalties come to mind. Recent amendments to the Ontario Securities Act setting out the punishment for the offence of misleading statements expose a defendant to a fine of up to $5,000,000, and imprisonment for up to five years less one day, or to both. While it is possible for a conviction under a provincial law to result in a sentence in a federal penitentiary[88], it is unusual for provincial statutes to authorize such sentences.[89] Moreover, while the introduction of the conditional sentence regime for criminal offences under the Criminal Code permits such sentences to be served outside of an institution where the sentence imposed is less than two years’ imprisonment[90], conversely, and “perhaps perversely”, as Archibald et al observe, “more people are actually going to jail for regulatory offences”, given the unavailability of conditional sentences for such offences.[91]

 

Motor vehicle infractions provide another point of comparison. While the minimum penalty for a drinking and driving offence under the Criminal Code was recently raised from $600 to $1,000, the minimum penalty under the Ontario Compulsory Automobile Insurance Act[92] for a first conviction for driving a motor vehicle without insurance is $5,000. A subsequent conviction carries a minimum penalty of $10,000. In the case of a person who is in possession of a false or invalid insurance card, the penalty for a first offence is a minimum fine of $10,000; subsequent convictions carry a minimum penalty of $20,000.

 

Under the Highway Traffic Act of Ontario, the offence of driving while suspended carries a minimum fine of $1,000 for a first offence, up to a maximum of $5,000. Subsequent convictions are punishable by a minimum fine of $2,000. In each instance, there is also the possibility of imprisonment for up to six months. Where the offence is in relation to a Criminal Code licence suspension, the minimum penalty increases to $5,000. for a first conviction, and $10,000 for subsequent convictions. There is also authority to impound the offender’s motor vehicle. Indeed, the Ontario Court of Appeal has upheld a sentence of 10 days imprisonment and a fine of $5,000 imposed for a defendant who did not attend his trial for driving while suspended, and was sentenced in his absence, as permitted under the Provincial Offences Act.[93]

 

The Highway Traffic Act offence of stunt driving or racing, which, as noted, was recently upheld by the Ontario Court of Appeal in Raham, provides another example: upon being charged the driver is required to surrender his/her driver’s licence to the police officer at the scene, and is subject to an automatic 7 day administrative licence suspension; the officer is required to impound the motor vehicle for 7 days at the cost and risk to the driver. In the event of conviction, the defendant faces a minimum fine of $2,000 with a maximum of $10,000, a term of imprisonment of up to 6 months, or both a fine and imprisonment, and a licence suspension for up to 2 years on a first conviction and 10 years for a subsequent conviction.

 

Indeed, even traffic fines have overtaken the quantum of fines “handed out for many criminal offences.”[94] Moreover, the “increased sanctions” for traffic offences in terms of high fines and demerit points, which may give rise to licence suspensions, mean that “traffic offence sentences are very much penal in nature in many cases.”[95] There may also be an “adverse effect” on insurance premiums, especially in the case of younger drivers.[96]

 

A case involving hunting charges under the Alberta Wildlife Act,[97] as well as Criminal Code charges which were added in the course of the investigation, provides another illustration of how fine the line is as between the “seriousness” of regulatory offences and criminal offences. In R. v. Mistol,[98] the Court considered whether the addition of criminal charges made the matter more serious for the defendants, such that their rights under the Charter of Rights and Freedoms needed to be reiterated. The Wildlife Act (Alta.) charges were hunting at night and hunting with a spotlight; the Criminal Code charges were obstruction of peace officers and failing to stop a motor vehicle while being pursued by peace officers. The Court stated that the question as to whether the criminal charges were “significantly most serious” was not easily answered, noting:

 

What is ‘serious’, like what is beautiful, sometimes lies in the eye of the beholder. To policemen whose lives are dedicated to the regulation and preservation of the wildlife resource, the offences they were ultimately investigating were probably more serious than the Criminal Code charges which ultimately were added to the hunting charges. The law lends some support to that argument since the maximum monetary penalty provided by the provincial statute is in fact higher than the maximum monetary penalty provided by the Criminal Code for the summary procedure offences.[99]

 

If the penalty amounts as between criminal offences and regulatory offences seem blurred, the line may be no more apparent as between regulatory offences themselves. It has already been noted that some monetary penalties for absolute liability offences, far from being minor penalties, are among the highest fines available, such as the flying truck-wheels provisions under the Ontario Highway Traffic Act or the administrative penalties pursuant to the Ontario Environmental Enforcement Act.

 

And what of the situation where the regulatory offence carries a mens rea requirement, such that it more closely resembles in nature a criminal offence? Should this not be a relevant consideration in sentencing, and thus reflected in the disposition of the Court? There is some authority in support of this proposition. In R. v. Virk,[100] a case involving mens rea offences under the Ontario Workplace Safety and Insurance Act, 1997[101] of making a false statement and failing to inform of a material change in circumstances, it was noted that very few public welfare offences fall into this category, thereby requiring the prosecution to prove wrongful intention or knowledge in addition to the prohibited conduct. However, where there is a mens rea element, and thus some degree of moral blameworthiness or fault, this is a significant factor and justifies a difference in approach to sentencing.

 

Madigan J. explained the rationale for such a distinction on sentencing as between the different categories of regulatory offences. He stated:

 

Not all public welfare offences are equal in gravity. Some are more serious than others. Those requiring proof of wrongful intention or knowledge are more serious, for sentencing purposes, precisely because the prosecution has proven a guilty mind in addition to the prohibited conduct. Convictions for absolute liability and strict liability offences usually suggest ‘… nothing more than the defendant has failed to meet a prescribed standard of care.’ However, offences like those alleged and proven in this case tend to involve an element of fault or moral blameworthiness in that they prohibit conduct which is inherently wrong. Quite undeniably, the intention to defraud and the intention to lie qualify as morally blameworthy.[102]

 

The Court went on to comment that on a continuum of offences ranging from “public welfare offences to true criminal offences”, the defendant had been found guilty of offences which were “more serious” and therefore more comparable to criminal offences than to public welfare offences.[103] As for the significance of this on sentencing, the Court observed:

 

In the case of most regulatory offences, the sentencing court usually attempts to balance the competing considerations in favour of rehabilitation of the offender and protection of the public. However, in cases involving proof of mens rea, the balance must favour the objectives of denunciation, retribution and deterrence. Whereas mens rea offences involve some degree of moral blameworthiness or fault, absolute liability and strict liability offences do not. This distinction justifies the difference in approach to sentencing.[104]

 

This approach to sentencing for regulatory offences, where the nature of the offence in question as either one of full mens rea, strict liability of absolute liability, is reflected in the sentence imposed, has been followed in numerous cases. These include decisions involving convictions for failing to remit retail sales tax, contrary to the Retail Sales Tax Act (Ont.),[105] where fines in excess of $100,000 were imposed; failing to declare earnings as required by the federal Employment Insurance Act[106]  where an Alberta court sentenced the defendant to 30 days’ imprisonment;[107] a breach of the Occupational Health and Safety Act, 1993 (Sask.)[108] for failing to develop safety procedures, resulting in the employer being fined $30,000;[109] engaging in unfair practices under the Business Practices Act (Ont.),[110] leading to imprisonment for 90 days, a restitution order and 2 years probation;[111] infringements of the Fair Trading Act (Alta.)[112] where fines and restitution orders were imposed;[113] and breaches of the Alberta Local Authorities Election Act [114] resulting in a jail sentence of 14 days and a $2,000 fine.[115] 

 

7. Matrix of Regulatory Offences Sentencing Decisions

 

To return to the differences between sentencing for criminal offences and sentencing for regulatory offences, there is one other important distinction to be noted. A statement of sentencing purposes and principles to guide sentencers has been included in the Criminal Code. There is no such statement enacted for regulatory offences under the Provincial Offences Act. What is it, then, that should guide courts when sentencing defendants for public welfare offences, and determining what kind of penalty to impose? Other cases for similar offences? Other cases for different regulatory offences? The statute creating the offence? Their own views of the offence or the offender? Comparable sentences under the Criminal Code for true crimes? These are some of the questions that currently face Courts when imposing sentences for regulatory offences, and giving effect to the enforcement mechanisms provided by the legislature.

 

Regulatory agencies have powers to oversee a broad range of activities in areas ranging from “quality of life” to “social regulation”.[116] Let us consider a matrix of regulatory offences in the area of workplace safety, consumer protection and environmental regulation. These regimes are necessarily broad and distinct, but an examination of sentencing practices and patterns in these areas may help reveal consistencies and differences in modes of sentencing theory. Regulatory agency sentencing patterns present important implications concerning the need for consistency and uniformity in the area of sentencing for regulatory offences generally.

 

Workplace safety. On his second day at work in a plastics factory, a teenager is operating an oven conveyor that has an unguarded pinch-point. He gets caught in the machine and dies. The defendant, a sophisticated businessman, and his company, are found guilty of creating a hazard which endangered a worker by failing to guard the pinch point.[117] The company is fined $30,000 and the individual defendant $10,000.[118] Why is it that the Court determined that a monetary penalty rather than a period of imprisonment was sufficient punishment for the individual defendant? Is the quantum of fine for the corporate defendant enough to persuade it to comply with the law in the future, or is it merely the cost of doing business which will merely be passed on to consumers of its products? What is the principle or principles of sentencing that the Court should consider in imposing the sentence in this case? Where are such principles of sentencing to be found? These are some of the questions facing sentencers when dealing with this workplace safety case.

 

Consumer protection. Over a period of 18 months, the defendant contracts to perform home renovations for 13 elderly or financially constrained families. For some of them, no work is done; for others there is a failure to honour any warranty. Their monetary loss is about $70,000. The money cannot be accounted for. There has been no restitution to the victims for any of their losses. The defendant is sent to jail for a total of 7 months.[119] This is more than the summary conviction ceiling of 6 months imprisonment under the Criminal Code. Did the Court essentially view the regulatory offence of committing an “unfair business practice” under the Business Practices Act (Ont.) as if it were fraud under the Criminal Code, given that there is a mens rea element in the former offence? Had the defendant been charged under the Criminal Code would he have received a similar sentence of imprisonment? Might he have received a conditional sentence of imprisonment so that he did not have to serve his sentence in jail? While this defendant abused the trust that his vulnerable victims placed in him and made off with all their money, for which he was sent to jail, the employer of the novice teenaged worker exposed him to the danger of an unsafe piece of equipment in the workplace for which the other lost his life, but that defendant was not sent to jail and given a monetary penalty instead. Are these two regulatory offences sentences compatible with each other? What are the principles of sentencing that leads to jail being imposed in one such case but not the other? Why is it that the more serious consequence of the regulatory offence, the loss of life of a worker, results in a fine, but the loss of money by vulnerable victims, results in a period of imprisonment?

 

Environmental regulation. The defendant, a municipal corporation, pollutes a major river with sewer discharge for many years, causing harm to several fish species, and adversely impacting the area’s reputation for tourism. However, the licensing authorities were aware of its conduct, and continued to issue water-use licences to the City despite its repeated non-compliance, and its obligation to build a proper sewage treatment plant. The Court imposes a fine of $5,000. But in addition the City is ordered by the Court to construct a sewage treatment plant so as to remedy any harm to fish or the fish habitat in the river. A time line is set by the Court as to when the plant was to be fully operational; for each month that the defendant failed to meet its timelines to have the plant in operation, an additional penalty of $5,000 would be imposed. The cost of building this plant is in excess of one million dollars.[120] Although the defendant has been convicted of the regulatory offence of pollution, contrary to the federal Fisheries Act,[121] the magnitude of the sentence imposed seems far beyond what might have been levied for conviction for a criminal offence: there is a fine, but the Court has additionally imposed a “creative sentence” to ensure that the conduct does not occur again, and that the defendant will clean up the damage it has already caused. This type of sentence seems aimed at both current and future behaviour by the defendant.[122] But is it sufficiently punitive? Should it matter that the defendant is a municipal corporation, and that the ultimate cost of the project and its ability to pay for it may be passed on to taxpayers, or that other municipal services may be impacted?

 

The matrix of cases above, in summary form, illustrates just some of the daunting questions faced by the Courts when imposing sentences for what are regarded by many as “minor offences”, but seem in reality to be quite serious breaches of public welfare statutes. Indeed, some may regard such offences as being at least as serious, if not more serious, than traditional criminal offences: the death of a worker in the first example; swindling elderly and vulnerable consumers out of their money  in the second case; and polluting a major river system and endangering the environment in the third case. Indeed, Justice Cory referred to similar illustrations in the Wholesale Travel Group Inc. case where he posed the question whether “the single mother who steals a loaf of bread to sustain her family more blameworthy than the employer who, through negligence, breaches regulations and thereby exposes his employees to dangerous working conditions, or the manufacturer who, as a result of negligence, sells dangerous products or pollutes the air and waters by its plant?”[123]

To some, harm to the environment merits greater sanctions than the commission of many criminal offences.[124] It has also been observed that while most people agree that causing death constitutes serious harm, and murder in fact carries the “harshest penalties in criminal law”, every year in Canada the number of deaths in the workplace, which are rarely treated as a crime, far exceeds the number of homicides. Thus, the concept of harm might indicate which behaviour is serious, but little in terms of how society ought to respond to it.[125]

 

While the factual issues in our matrix of cases seem very different from each other, they all involve, in common, breaches of regulatory statutes.  A fine is imposed in one case, jail in another. Construction of a sewage treatment plant is ordered in the third case. Are these sentences consistent with each other, or responsive to the underlying breaches of the public welfare statute in question? Where is it that the sentencers should look for guidance in these types of cases? Workplace safety, consumer protection and environmental regulation provide classic examples of strict liability offences, but as one can see, there are many differences in the nature of the conduct sought to be regulated.

 

8. Statement of Sentencing Purposes and Principles in Other Statutes

 

 In some cases, the public welfare statute creating the offence may address the issue of sentencing principles. Examples of this are found in environmental laws where the “polluter pays” principle is set out.  According to this principle, polluters are assigned the responsibility for remedying contamination for which they are responsible, and bear the direct and immediate costs of pollution.[126] Indeed, in the Quebec Environmental Quality Act[127]  this principle contained in the legislation was approved by the Supreme Court of Canada.[128] Moreover, the Court noted that this principle has become “firmly entrenched” in environmental law throughout Canada, as it is found in almost all federal and provincial environmental legislation.[129] It is also recognized at the international level, such as the sixteenth principle of Rio Declaration on Environment and Development.[130]

 

In other statutes, a statement of sentencing considerations is included, such that the sentencer is specifically directed to take into account the enumerated criteria. The Canadian Environmental Protection Act, 1999[131] exemplifies this approach. Nine distinct factors are set out, such as the harm or risk of harm caused by the commission of the offence, whether any remedial or preventive action has been taken or proposed by the offender, and whether the offender committed the offence intentionally, recklessly or inadvertently. The Canada Shipping Act, 2001[132] provides a similar list of factors for the Court to consider in determining the appropriate punishment for the offence of discharging a pollutant.

 

The recently enacted British Columbia Public Health Act[133]  contains sections on determining the appropriate sentence, and the purposes of sentencing. Under the former, the Court is directed to consider the purposes of sentencing set out in the legislation;[134] the latter directs the Court to consider imposing one or more penalties to achieve factors such as furthering the regulatory objective underlying the provision that was contravened, or rehabilitating the offender.[135]  However, such provisions are specific to the legislation in question, and have no application to other public welfare statutes. As a result, guidance to the courts is not provided on a more general level as to how sentencing should relate to “the regulatory objectives the legislators desire to achieve.”[136]

 

Given the lack of legislative direction in most such statutes, including the Provincial Offences Act, some Courts have attempted to summarize in a comprehensive manner the relevant sentencing principles for regulatory offences. The Law Reform Commission of Canada has referred to this approach as a “shopping list” of sentencing factors.[137] An example of this summary of sentencing principles approach is illustrated in R. v. Fraser Inc.[138], where the defendant admitted responsibility for polluting a river with discharge from its pulp mill, contrary to the New Brunswick Clean Environment Act[139]  The Court provided a list of 23 separate factors for consideration, including the nature of the offence; potential for actual and possible harm; the deliberateness of the offence; profit, if any realized; attempts to comply; the ease or difficulty of preventing pollution; technology available; and whether the offence resulted from negligence or not.

 

This “multiple approach of applicable factors”[140] has been applied in numerous other environmental cases, including contravening approval and enforcement orders made under the  Alberta Environmental Protection and Enhancement Act[141] respecting dust emissions and noise from the defendant’s alfalfa processing operation;[142] discharging a pollutant into the city’s sewer system;[143] depositing a deleterious substance in water frequented by fish;[144] pollution from a sewage lagoon;[145] and unlawfully transporting dangerous goods.[146] It has also been employed in cases involving breaches of other public welfare offences, such as failing to ensure the health and safety of workers, contrary to the Occupational Health and Safety Act (Sask.),[147] where a worker was crushed between the bucket lever arms and body of the loader;[148] and failing to develop safety procedures.[149]

 

The problem with this “shopping list” or multiple factors approach is that no single sentencing principle or principles is emphasized, and there is the very real risk that it “loses sight of the fundamental purposes of sentencing.”[150] Neither does there appear to be a priority or ordering among the various factors themselves. Indeed, the approach may be said to invite a new level of risk assessment that may be inconsistent with the “legislative assessment” as set out in the legislation.[151] As Verhulst notes, inconsistency “clearly remains” as it is not apparent how the approximately two dozen principles that have been applied for regulatory offences by the Courts interrelate, which principles are to be given priority, and which factors are to be considered as aggravating or mitigating.[152]

 

9. Conclusion

 

In summary, while it may be an overstatement to say that there is at present “chaos” in sentencing for regulatory offences,[153] the statutory provisions which govern sentencing in regulatory offences resemble “a patchwork quilt … in need of reform.”[154] The fact that Courts have attempted to fill in the gaps, when faced with the bewildering array of regulatory offences, enforcement mechanisms, and penalty provisions, is a testament to both the recognition and magnitude of the problem.

 

There is a need for a consistent and rational approach for sentencing purposes and principles for regulatory offences. To consider how this might be done, and what form it should take, sentencing principles generally for true crimes or criminal offences will be examined in the next Part, with particular emphasis on how the issue of inconsistency or disparity of sentencing among the various types of offences and offenders is addressed. Thereafter, one may turn to these same issues for regulatory offences, with the benefit of the experience gained from criminal offences, and consider what sentencing principles may lend themselves to the paradigm for minor offences, as opposed to true crimes. Only then will it be clear just how much the patchwork quilt is in need of reshaping and reform, and how this might best be accomplished. 

 

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