IV. SETTLING ON SOLUTIONS2017-03-03T18:35:01+00:00

A. The Regulatory Cycle and its Role in Shaping Purposes and Principles of Sentencing for Regulatory Offences
1. Introduction

There is presently, as has been noted, no identified set of sentencing purposes and principles for regulatory offences. As a result, it is up to each court, in each case, to assess the circumstances of the offence, and the offender, and to impose a sentence that best reflects the mélange of principles of traditional sentencing theory, including denunciation, deterrence, protection of the public, rehabilitation, reparations, and promoting a sense of responsibility in offenders along with an acknowledgment of the harm done to victims and the community, all in juxtaposition to public welfare or regulatory offences. But such offences correspond to an incredibly diverse and complex series of activities, ranging from protection of the environment, workplace safety and motor vehicle infractions.[645] These are but a few examples. Public welfare laws, as has been noted, “pervade the lives of ordinary people.”[646]

In a recent article on sentencing for regulatory offences, Verhulst comments that unlike sentencing in the criminal process where the imposition of punishment concludes a morally blameworthy offender’s dealings with the state, sentencing in the context of regulatory offences, which are for the protection of the public from conduct which is not intrinsically evil, is better viewed as part of a cycle, and not the culmination of a process.[647] That is, sentencing is merely one part, albeit a most important part, in the regulatory offences paradigm. The beginning of the regulatory cycle involves the identification of regulatory objectives; provisions are subsequently devised, and implemented, to give effect to these objectives, including the creation of regulatory offences.[648] Enforcement strategies may thus include prosecution, in which case the offender, upon being convicted and sentenced, is often permitted to return to participate in the regulated activity, thereby continuing to be involved in the regulatory cycle, even after the imposition of punishment by the court.

If criminal offences and regulatory infractions reflect different societal interests and purposes, it follows, as Verhulst suggests, that punishment principles should also mirror these differences. That is, the rationale for punishment imposed by the court for a criminal offence and that for a breach of a regulatory provision should find expression in the sanction or disposition of the court. As Gunningham observes, sanctions ought to be “sensitive to the nature of the behaviour to be controlled.”[649] It is here that the regulatory cycle takes on particular importance: unlike criminal conduct where the party’s actions will cease and the court’s punishment will conclude the defendant’s interactions with the state, the regulated actor will usually be permitted to continue participating in the regulatory endeavour, even after punishment has been imposed, unless even more severe enforcement actions are necessary, such as a licence suspension or revocation, that is, the final stages of the regulatory enforcement pyramid. Regulatory theory, particularly as it relates to those who come into contact with the enforcement mechanism of prosecution, therefore has the potential to play an important role in the shaping of sentencing purposes and principles for regulatory offences. Stated shortly, regulatory theory can and should influence sentencing practices since regulation and sentencing alike are part of the same cycle; placing the offender within the regulatory context on sentencing allows the court to understand the underlying regulatory objectives.

Scholars like Gunningham,[650] Braithwaite,[651] Breyer,[652] and Archibald et al[653] make important contributions to regulatory theory literature in this area through their work on the model of the enforcement pyramid as it relates to regulatory offences. However, these studies tend to focus on the perspective of regulators, and their efforts to encourage regulatory compliance through enforcement strategies, but less so towards the attitudes of the regulated parties themselves, and the extent to which such factors should inform the disposition of the sentencing court in its choice of the appropriate sanction. The conduct of those being regulated, and an understanding of their motivations and responses to initiatives designed to induce compliance, is an important consideration for sentencing courts. “Attitudes” may be judged along with “activities”.[654] Thus, it is necessary to distinguish between regulations and regulators, and those who are the intended beneficiaries of such “social policy objectives,” including both the regulated parties and the public at large.[655] After all, as Glasbeek puts it, regulatees do “play a large role in the regulation of their activities”, for they, and not regulators, are the “best judges of their self-interest, they are the ones with the requisite skills and abilities to measure the costs and the benefits of their activities.”[656]

The focus of this section, then, will be to explore and critically analyze the concept of the regulatory cycle, and examine how it has the potential to play an important role in shaping regulatory offences sentencing purposes and principles. A proper understanding of the regulatory cycle is essential for courts when imposing punishment for regulatory offences, so as to better promote regulatory sentencing objectives and outcomes. The identification of sentencing purposes and principles for regulatory offences bolsters, in turn, the ability of courts to select the sanction that best encourages the regulated actor’s successful reintegration within the regulatory cycle.

In terms of this section’s organization, there is first an overview of the concepts of risk assessment and risk management, which are central to the notion of the regulatory cycle. Whereas the risk assessment process leads to the choice of regulatory strategy, the risk management process leads to the choice of enforcement strategy. This is followed by a discussion of regulatory enforcement pyramids which include, as one option, prosecution of regulated parties who fail to meet the regulatory standard. The focus then moves to the two central topics which apply these key concepts:  (i) “penalties principles”, and (ii) changing regulatory strategies. Penalties principles apply to both the particular choice of sanction within the enforcement pyramid, and to the choice of sanction by the courts; an appreciation of changing regulatory strategies allows the court, when crafting its sentence, to better understand the offender’s past and current behaviour. In the conclusion, observations are made for future consideration as to the utility of the regulatory cycle, and its potential for playing a role in the debate concerning the identification and enactment of sentencing purposes and principles for regulatory offences.       

2. Risk Assessment and Risk Management

The regulatory cycle has its roots in risk assessment and risk management theory, concepts which were touched on briefly in Part I. 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.[657] Risk assessment is a “scientific assessment of the true risk” whereas risk management “incorporates non-scientific factors to reach a policy decision.”[658] 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.[659] However, it is at the sentencing stage that courts have the opportunity to address the regulatory standards which have been set by the legislature. That is, it is only where a regulated party has been found to have breached the regulatory standard that the court has the opportunity of quantifying this shortcoming, as reflected by the penalty it imposes. 

In short, the risk assessment process informs the choice of regulatory strategy. That is, it forms the basis of regulation, and the choice of what conduct will be required or prohibited. It is important for courts to be mindful of these regulatory objectives, so that consideration can be given to the type of sentences which will be both appropriate and assist in achieving those objectives. The risk management process, in turn, leads to the choice of enforcement strategy. It impacts on the enforcement pyramid, and the choice of sanction sought by the regulator on contravention of the regulatory standard. An appreciation of this assists the court, on sentencing, in understanding the past and current behaviour of the offender. Specifically, it draws attention to any problems in the regulatory strategy that may have adversely affected compliance; it also reveals the nature of the relationship between the regulated party and the regulator, including enforcement practices. These factors are relevant to the court, and assist it in crafting a sentence that is responsive to the needs of the offender, particularly in moving the regulated party back to achieving compliance. It is important, then, to examine the concepts of risk assessment and risk management at the outset, as they comprise the foundation of the regulatory cycle. 

Risk assessment is described by Salter and Slaco as a “problem-oriented concept” whose use is said to imply that “developments should be allowed to proceed, and products used, unless serious problems have been identified.”[660] The authors go on to point out that, whereas the model for risk assessment is largely taken from epidemiology, where comparisons of rates of fatality or disease are based on statistical information, there are no “standard yardsticks” for the measurement of risk in forums such as inquiries. Although inquiries are not the same as courts, the former is an instrument of the legal process which can take “evidence”, and under specific conditions, such testimony can be used in a court. Science and scientists, however, are routinely used in the “making of public policy” or “mandated science” as Salter calls it. [661] Indeed, science in government is “tied closely to regulating and managing risks.”[662] Risk assessment may be viewed, then, as “a procedure for bringing together a scientific and a value-based assessment.”[663] That is, the scientific assessment of risk is “converted” into regulations or laws which are enacted or codified by legislators.[664]  

Yet, as Breyer notes, it is not all risk that is the subject of regulation, but only that which regulators identify in order to “make our lives safer by eliminating or reducing our exposure to certain potentially risky substances or even persons.”[665] Measures designed to eliminate or reduce risk can be “enormously costly.” [666] Whenever individuals engage in an activity, “there is a risk and eliminating that risk carries a cost.”[667] Risk assessment may be considered, though, as an “essential means of directing regulatory resources where they can have the maximum impact on outcomes.”[668] There must therefore be not only a “real scientific basis” for the regulations or law that result from risk assessment, but a value judgment as to the desirability of expending resources to achieve this regulatory result.[669]

Risk assessment is the “technical part” of the regulatory system.[670] It is designed to measure the risk associated with the substance. Risk assessment may be divided into four discrete activities: (i) hazard identification (ii) dose-response assessment (iii) exposure assessment (iv) risk characterization.[671] Risk management, on the other hand, is “more policy-oriented”, and involves determining “what to do about it.”[672] That is, risk management is the means by which the regulator decides what do about the “risks that the assessment reveals.”[673]   This process entails weighing policy options in view of the results of risk assessment, and “selecting appropriate control options including regulatory measures.”[674]

An integrated framework for risk assessment and risk management consists of six stages: (i) defining the problem and putting it in context (ii) analyzing the risks associated with the problem in context (iii) examining options for addressing the risks (iv) making decisions about which options to implement (v) taking actions to implement the decisions (vi) conducting an evaluation of the action’s results.[675] Predicting risk is a “scientifically related enterprise.”[676] Certainty and objectivity are key components of the scientific process.[677] On the other hand, the “translation of risk assessment into law” entails a process of risk management involving the “incorporation of non-scientific factors to reach a policy decision.”[678] Ricci observes that risk assessment “develops choices” for risk managers to rank according to criteria such as risk-cost-benefit analysis, and “implement, monitor and change as new knowledge becomes accepted.”[679]

But for regulators regard must also be had to a plethora of other factors, including circumstances which may be constantly changing, and require the expertise of other disciplines in order to arrive at a decision. In addition to a “science foundation,” there may be policy and “political considerations”.[680] Issues take on more complexity when there is a “public interest involved.”[681]  Maintaining the public’s confidence requires that all of the relevant information ought to be considered.[682] The public must be apprised of the “realities” of risk management.[683] Scott puts the matter this way: while risk can be measured precisely by a formula which is a “simple function of the magnitude of the loss and the probability of occurrence”, the question for “ordinary people” whether a particular activity is considered risky depends on factors external to consequences or magnitude of the loss, and the probability of occurrence.[684] That is, while science provides a means for calculating the “probability of harm under certain conditions”, decisions as to the “acceptability of risk” are beyond the proper scope of science and are the subject of risk management.[685] Regulatory risk management “prioritizes different types of risk and permits a calculation on which a plan of action can be based.”[686]

3. Regulatory Enforcement Pyramids

Instituting a prosecution before a court of law is one such “plan of action,” as noted above, in the regulatory risk management spectrum. However, courts and regulatory agencies may view the risk associated with products or activities in very different ways. Each represents different institutions with different interests. What seems unreasonable to a court may not appear to be unreasonable to a regulator.[687] 

Regulators are concerned with reaching administrative and practical results that help attain the general public interest goal of the legislation in question; indeed, this may represent a compromise solution which is deemed acceptable by the groups involved. Regulators, it has been observed, prefer to think of themselves as “expert advisers rather than industrial police.”[688] The sphere within which regulators operate is “dynamic and proactive.”[689]  Courts, on the other hand, must make decisions based on the record placed before them, without necessarily all of the relevant facts or further factual investigation. The judge’s ruling must be “fair, the merits of which depend upon the relevant legal norm.”[690] The role of the court is not to seek out additional information beyond that which is placed before it; neither is it concerned with establishing a working relationship with the parties. There is, in the context of a prosecution, an adversarial relationship between the parties themselves; the court is to take a detached, neutral role in making a determination on the merits of the case.

For these reasons, a compromise solution that is considered reasonable by a regulator, due to practical and administrative considerations, may not seem “rational” to the judge upon viewing the matter in light of statutory interpretation and legal precedent in relation to the merits of the case.[691] Courts are “policy interpreters” whereas regulators act as “policy makers.”[692] Regulators do not simply make and enforce rules: they “commonly carry out a number of administrative, judicial-like, policy analysis, and other functions.”[693]

Given these limitations in the court system, and the breadth of regulators’ responsibilities, punishment is weighed by regulators along with other compliance measures. It is here that the enforcement pyramid illustrates the graduated choices available to regulators, only one of which is prosecution. In fact, in the enforcement pyramid, most offences, explains Braithwaite, are at the base, and attract “gentle sanctions”; the intention is that “progressively fewer suffer the tougher sanctions.”[694] This approach acts as a deterrent to those who fear being singled out and having the “book thrown at them.”[695] At the same time, it encourages those who are being regulated to reform their ways so as to receive treatment that is more lenient. Regulatory institutions must be able to protect society “against knaves while leaving space for the nurturing of civic virtue.”[696] Excellence in compliance, as Haines and Gurney observe, will not be achieved by “regulatory strategies in isolation from enforcement.”[697]

The base of the enforcement pyramid, then, is concerned with persuasion: most regulatory action occurs at the lowest level of the pyramid where attempts are made by regulators to coax compliance from the regulated.[698] Voluntary or negotiated compliance measures, however, must be “backed” by other options. Thus, in the next phase of escalation are warning letters. Attempts to secure compliance thereafter are through the means of civil monetary penalties. It is only following this stage that criminal prosecutions are brought. Should further steps of increasing severity be required, it is open to the regulator to seek a shutdown or temporary licence suspension of the regulated activity. The final step if this fails is permanent licence revocation.[699] From a regulatory perspective, it is essential that the response be “neither too lenient nor too severe.”[700] In the “responsive regulation” approach, escalated responses which result in compliance must be followed by measures to “de-escalate down the pyramid.”[701] To put it another way, the behaviour of the regulated party serves to “channel the regulatory strategy to greater or lesser degrees of government intervention.”[702] The goal is to encourage laggards to become leaders and “committed compliers”.[703] As Baar puts it, “positive compliance programs” seek to find the “right balance between persuasion and punishment.”[704]

The regulatory enforcement pyramid may be adapted to the theories of risk assessment and risk management.[705] Braithwaite uses the term “meta risk management” to describe the “risk management of risk management,” which is the application of risk management techniques to determine which level of risk management will be used by the State towards the actors in question.[706] Of course, risk assessment techniques are not infallible, and the risks of non-compliance may be great, as where the regulated activity concerns the potential for harm as opposed to lost revenue.[707] However, the application of risk management principles to the regulatory enforcement pyramid, and the more efficient deployment of regulatory resources, constitutes a “shift from reactive law enforcement to proactive risk management” where the regulator “scans its environment for the greatest risks and moves resources to where those risks can be managed.”[708]

Gunningham and Johnstone observe that while the enforcement pyramid involves both “carrots and sticks”, it is usually the case that persons being regulated respond better to rewards than to punishments.[709] Moreover, those who comply willingly or voluntarily tend to do so with “far more commitment and effect” than those who are reluctant to undertake such efforts, and become compliant only under “threat of penalty.”[710] In sum, “volunteers almost always behave better than conscripts.”[711]

Indeed, Braithwaite’s approach may be said to be “bottom heavy” since it is contemplated that most action takes place at the base of the enforcement pyramid.[712] In Ayres and Braithwaite’s view, regulatory agencies are most effective at securing compliance when they act as “benign big guns.” That is, regulators can “speak softly” when they carry “big sticks”, including a hierarchy of lesser sanctions; the larger and more various the sticks, the greater the likelihood that success will be achieved by “speaking softly.”[713] Punishment is “expensive” whereas persuasion is “cheap”. [714]At the same time, however, while regulators are attempting to build relationships with regulatees, other processes may be involved and operate at cross-purposes, such as organizations dealing with compensation claims for injured parties, or inquiries as to the cause of industrial accidents, where issues of fault or blame potentially arise. [715]

The relationship between regulators and the regulated parties is hardly static or one-dimensional. Neither is this the product of the size of the enforcement weapons that are wielded by the former, nor the pain that may be inflicted on the latter. Just as regulators have the ability to move up and down the enforcement pyramid, the regulated parties may respond to initiatives aimed at inducing compliance with more or less commitment. The manner in which regulatees comply with their obligations is described by Johnstone as consisting of three stages:  (i) a commitment to compliance (ii) learning what procedures are necessary for compliance (iii) institutionalizing compliance by implementing risk management systems.[716] These stages are not necessarily unilinear, and regulatees may move both backwards and forwards throughout the different phases.[717]

In the first such stage, a form of “self regulation” takes place, owing to a commitment by management or the individual to comply with the regulatory regime. There may be a number of reasons or incentives for doing so, ranging from the desire to avoid unfavourable publicity, the imposition of a new regulatory requirement, or the result of a “shock induced by enforcement action”.[718] The second phase involves learning how to comply or putting into effect a “design and establishment.”[719] It is during this juncture that risk management systems are typically developed.[720] Finally, there is institutionalism of compliance measures. According to Hutter, there are two discrete phases in this process: first, an “operational phase” where risk management systems, procedures and rules are implemented, and second, a “normalization phase” where behavioual change is institutionalized, and there is “compliance with risk management procedures and rules as part of the normal, everyday life” on the part of the regulated party.[721]

4. The Regulatory Cycle and “Penalties Principles”

Despite the best efforts of regulators and regulatees, non-adversarial efforts aimed at achieving compliance, including negotiation, may not prove successful, and prosecution might appear at some point to be the most appropriate enforcement response. It is clear that in terms of the regulatory enforcement pyramid, this is not the sanction of first choice; but neither is it the final option. Where charges are brought before a court, a successful prosecution will lead to conviction and punishment. However, unlike criminal conduct where the underlying act is blameworthy and morally wrong, leading to a penalty to deter the guilty party from repetition of the offence, regulatory offences are not inherently evil, and the regulatee will usually be permitted to return to participate in the regulated activity, even after the imposition of punishment by the court. 

This distinction between “true crimes” and regulatory offences was noted in the Supreme Court of Canada’s decision, Sault Ste. Marie, where Dickson J. explained that public welfare offences are not “criminal in any real sense”, but are prohibited in the public interest.[722] 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.”[723] 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.[724] 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.”[725]

Professor Macrory in his report on Regulatory Justice in the United Kingdom has identified a series of “penalties principles” that might serve as the basis for a regulatory offences sanctioning regime.[726] These principles are triggered by the enforcement apparatus of the pyramid, where less intrusive compliance strategies have failed to achieve the desired result. Penalties principles apply to not only the particular choice of sanction within the enforcement pyramid, but to the choice of sentence by the courts. They are a bridge between administrative and judicial sanctions. While regulators and courts have different roles and responsibilities, they both work toward achieving the same end within the regulatory context. That is, by operating under the same penalties principles with respect to the choice of sanction, there is a harmonization with respect to regulatory outcomes by courts through its role in the regulatory cycle. It is therefore important for courts to consider such punishment principles when imposing penalties for regulatory offences, since not only will the party usually be permitted to resume involvement in the regulated activity, the sentencing process also permits the court to “actively participate in achieving regulatory goals.”[727] 

This task is no simple one, since sentencing purposes and principles for regulatory offences have not been legislated in any Canadian jurisdiction to date. Some provincial statutes do contain a list of sentencing considerations, such as the Ontario Environmental Protection Act,[728] which enumerates a list of aggravating factors, including whether the offence caused an adverse effect or resulted from reckless or intentional behaviour, as well as the defendant’s conduct after the commission of the offence, including cooperation with the authorities,[729] and British Columbia’s recently enacted Public Health Act,[730] which addresses the relevant considerations in determining sentence[731] and the purposes of sentencing.[732] However, this is often not the case. Moreover, these statutes are not of general application, and hence such sentencing provisions do not apply to other legislation, even in relation to regulatory offences of a similar nature.[733]

The Macrory “penalties principles” provide a framework for how a court might further regulatory objectives in sentencing the regulatee at this particular stage of the regulatory cycle. Just as regulators select certain sanctions in the enforcement pyramid so as to produce a desired impact on regulatees, when the enforcement mechanism of choice is prosecution the court in imposing punishment must understand what the sanctions are intended to achieve, so that it imposes a sentence which furthers the underlying regulatory objective, while also permitting the party to resume participation in the regulated activity. Verhulst puts the matter this way:

By crafting a well-thought-out sentence that takes the regulatory cycle into account, the courts can actively participate in achieving regulatory goals. To do so, they must understand the regulatory scheme and the place of the offender within it, and then craft sentences that seek to align offenders’ behaviour with those goals.[734] 

What, then, are Macrory’s “penalties principles”?  In the consultation document released by Professor Macrory, six such considerations were put forward as the basis for any sanctioning regime.[735] First, sanctions should change the behaviour of the offender. Second, sanctions should ensure that there is no financial benefit obtained by non-compliance. The third principle is that sanctions should be responsive and consider what is appropriate for both the particular offender and regulatory issue. Fourth, sanctions should be proportionate to the nature of the offence and harm caused. Fifth, sanctions should aim to restore the harm caused by regulatory non-compliance. Finally, sanctions should aim to deter future non-compliance.

The first penalties principle is directed at changing the regulated party’s behaviour. This is to say a sanction should not be “focused solely on punishment”, but that it should also ensure that the offender will be less likely to break the law in the future.[736] The second principle seeks to prevent offenders from benefiting financially from non-compliance. In this manner firms and individuals who seek to profit from breaking the law will be met with sanctions “specifically targeting the financial benefits gained through non-compliance,” the intention being to reduce any financial incentive for engaging in such behaviour.[737]  Responsive sanctioning is the goal of the third penalties principle. It is desirable that the regulator be able to exercise discretion and determine whether the regulated party would respond to sanctions which are less punitive than prosecution, having regard to the particular offender and the particular regulatory issue.

Proportionate sanctioning is the subject of the fourth penalties principle. Whereas the previous principle addresses the reasons for the failure of the regulatee to comply, this principle is concerned with the nature of the non-compliance, and its consequences. The goal is to ensure that offenders are “held accountable” for the impact of either actual or potential consequences of their non-compliance, and that such considerations are “properly reflected in any sanction imposed.”[738] The next principle is related: where harm is caused by the offender, the sanction should include an element of restoration of such harm. Finally, the principle of deterrence is relevant. A sanction should discourage future non-compliance. This is accomplished by sanctions which send the message to the regulatory community that “non-compliance will not be tolerated and that there will be consequences.”[739] 

Macrory’s Final Report, entitled Regulatory Justice: Making Sanctions Effective, contained the recommendation that regulators be guided by these six penalties principles.[740] The characteristics which guide the framework within which regulators operate were also set out, but augmented by one additional factor: regulators should avoid “perverse incentives” that might influence the choice of sanctioning response.[741] The report explained that penalties principles “help build a common understanding of what a sanctioning regime should achieve amongst regulators and the regulated community” and that this provides a framework for regulators when deciding what enforcement action or sanction to choose.[742]  It also provides a safeguard that sanctions will be used “fairly and consistently.”[743] Macrory acknowledged that it might not be appropriate for all of the penalties principles to apply in each case; however, for the purpose of consistency of approach, the principles should “always be considered” by a regulator when “taking an enforcement action, or designing a specific sanctioning scheme.”[744] In addition, it was emphasized that the penalties principles were to be regarded as the “underlying basis” of regulators’ sanctioning regimes so as to achieve consistency, and not as “legally binding objectives.”[745] To this end the majority of the principles were best understood, and now expressed, as “aims” rather than “absolutes.”[746]

These penalties principles inform the regulator’s choice of prosecution in the enforcement pyramid. They become necessary when negotiation or lesser coercive measures are no longer considered to be a viable option. Not all of the penalties principles need necessarily be applied at once, or to all of the parties whom are being regulated. However, the penalties principles assist the court in imposing punishment by providing a rationale for the sanction being pursued. That is, the court will be better equipped to craft a sentence promoting compliance if it is clear what goals the sanction is intended to achieve. Most importantly, this enables the court to view more accurately the party at one particular stage of the regulatory cycle, as opposed to at its “end”. For not only is it most likely that the offender will be permitted to continue to engage in the regulated activity following the imposition of sentencing by the court, which is doubtlessly in the interests of the regulatee, but, as Verhulst notes, it is also in society’s interest for this to happen, since the regulated activity in question “may be socially beneficial, creating employment or needed goods and services.”[747] What is not in the societal interest is for “continued engagement” by the regulated actor in the behaviour that gave rise to the commission of the offence in the first place.[748]

In summary, there is a certain irony in the use of prosecution by regulators and the seeking of sanctions where, as Hawkins puts it, “there is already a body on the floor.”[749] When a regulator identifies risk, and it is determined that “something ought to be done about it”, a different set of considerations arise.[750] That is, in a “high risk situation”, the procedures that will be employed by the regulator will differ from those in a “low risk situation.”[751]  Risk characterization requires such determinations; categorizing the result informs the regulator’s assessment of the risk and the response it deems appropriate to take. But regulatory strategies themselves are not always constant, and this gives rise, in turn, to compliance issues for the regulated parties in meeting the requisite standard of care. Regulation may not guarantee the safety of the worker in Hawkins’ example, but it is nevertheless essential to have a stratagem in place for the regulated activity.[752]

5. The Regulatory Cycle and Changing Regulatory Strategies

Viewing an offender at a particular point of time in the regulatory cycle is important for another reason, apart from the role it should play for the court at the time of imposing punishment. It also promotes an understanding of the nature of the regulated activity and how the party fits within it, in light of changing regulatory strategies. This is important for two discrete reasons put forward by Verhulst. The first is that the manner in which many activities are currently being regulated is moving away from “clearly articulated standards”; the second is that regulatory schemes are being enforced in a “less adversarial” manner.[753] In other words, the “regulatory environment is changing.”[754]  Consequently, these trends are relevant at the time of sentencing, not just for the purposes of determining what is an appropriate penalty for non-compliance, but so that the court can view the party in a way that is different from one situated in the more traditional regulatory context and take this into account when assessing the reasons for the offender’s failure to comply with the regulatory standard.

The notion of the court acting as a partner in the regulatory cycle is hardly a novel idea. In a report submitted to the Department of Justice in 1991 on positive compliance programs, Baar identified the problem of courts “forgiv[ing] non-compliance without an adequate understanding of the consequences of their actions for the quantum and distribution of risk and for the incidence of non-performance.”[755] The result was termed an “enforcement deficit”, which reduces the incentive to “invest in compliance.”[756] In terms very similar to those of Verhulst, the authors cautioned against deterrent or punitive responses by the court, as opposed to the goal of determining whether the regulated actor’s “performance was inadequate and to impose the standardized incentive.”[757] Indeed, the concern was expressed that the courts might “check regulatory discretion” and undermine the regulator’s ability to “achieve their objectives.”[758]

An analogy may be drawn in this regard to the importance of courts giving reasons for judgment so that the parties understand the basis of its decision. The Supreme Court of Canada has held that the delivery of “reasoned decisions” is inherent in the judge’s role such that an accused person should not be left in a state of doubt as to why a conviction has been imposed.[759]  In the case of regulatory offences, it has been observed that reasons for judgment serve another important function.  Since the purpose of regulatory offences “is not so much to punish, as to encourage compliance with the regulatory standards”, it is important for the offender, and others in the same position, as well as inspectors and agents of the regulator, to know “what the legal standard requires.”[760] After all, as Black puts it, a rule “is only as good as its interpretation.”[761]

In much the same manner, the regulated party may find that it is alleged that he/she has failed to comply with a regulatory standard, although the standard has not been “clearly articulated,” thereby inhibiting the regulatee’s ability to understand the basis of the regulator’s decision.[762] In fact, some regulators have moved away from design-based regulations, where the party is expressly told “how to do things.”[763] While this approach has the advantage of being “clear and direct”, it also may be said to be subject to the limitation that it is “often slow to adapt to changing technology and expertise, and consequently may impair efficiency and innovation” in the regulated area.[764] Design-based regulations set out “detailed, prescriptive rules.”[765] However, as one regulator has recently observed, despite such supervisory actions as to how firms should operate their business, such prescriptive standards “have been unable to prevent misconduct”, and have become “an increasing burden” on both the industry and regulator’s resources.[766] Of course, the same might be said as to the limitations of criminal standards to prevent misconduct, and yet one would not necessarily suggest that such standards should be abandoned. This may properly lead, though, to a re-evaluation of the approach being undertaken so as to best promote compliance with the law or standard.  

As a result, other regulatory strategies may be employed which shift the emphasis away from “reliance on detailed, prescriptive rules” to “high-level, broadly stated rules” in order to achieve the regulatory objective.[767] Such methods of regulation include “outcome-based” regulation which provide for a measurable result to be achieved, but without stating how to achieve it; “performance-based” regulation, which provides for a non-measurable result to be achieved; and “principles-based” regulation, which sets out only an operational goal.[768] On the other hand, these approaches contain less specific criteria, and may give rise to uncertainties as to how the result is to be optimally achieved. It is also to be acknowledged that regulatory offences cover such a broad range of activities that regulators may find that one strategy produces better results for certain types of activity, such as prescriptive rules for transportation of inherently dangerous substances, whereas a less detailed principles-based regulation might suffice for setting clean air levels.   

The differences between these respective regulatory strategies may be illustrated by the following example concerning air pollution. In a “design-based” system the operator would be expressly told how to do things, such as “an operator must install a specified scrubber in a smoke stack.” Conversely, in an “outcome-based” regulation, the requirement might state “an operator must ensure that emissions from a smoke stack contain less ‘x’ parts per million of particulate matter ‘y’”. In a “performance-based” regulation, the requirement might read “an operator must ensure that emissions from a smoke stack do not contain particulate matter ‘y’ in concentrations that may pollute the immediate environment.” Finally, in “principles-based” regulation, the requirement might be worded “an operator must operate in a manner that is environmentally sound.”[769]

It can be seen that in contrast to design-based regulation, these other enforcement strategies provide regulated persons with “greater operational flexibility.”[770] However, at the same time, the standards may be not be as well-defined, thereby creating potential for uncertainty for the regulated parties, among others, in terms of what is required for compliance, or at least acting with due diligence so as to avoid liability for the commission of a regulatory offence. Black acknowledges this concern for principles-based regulation, conceding that “it must be possible to predict, at the time of the action” whether or not it would be a breach of a principle.[771] The same concern would be warranted, albeit to a lesser extent, in respect of performance-based regulations, and even outcome-based regulations. It may be that the more imprecise the regulatory strategy, the more egregious the result that is required so as to warrant prosecution, since uncertainty in measuring outcomes may detract from proof of the regulatory offence. The fact remains, however, that sentencing courts when dealing with the offender at this particular juncture of the regulatory cycle are presented with a unique opportunity to examine the regulatory strategy in issue, and consider “how sentences can be used to assist offenders to determine, meet and even exceed regulatory standards in the future.”[772]

The movement away from design-based regulation has been accompanied by another change in regulatory strategies, namely, a shift to a less adversarial approach to enforcement, or more measured use of this step of the regulatory enforcement pyramid.[773] In the case of a design-based standard, it should be apparent whether enforcement action is clearly warranted: the operator, in the air pollution example above, has either installed a specified scrubber in a smoke stack or not. Likewise, it should be readily apparent when an outcome-based standard has been violated, the requirement in the air pollution example being that “an operator must ensure that emissions from a smoke stack contain less ‘x’ parts per million of particulate matter ‘y’”. As Verhulst comments, either the outcome is within “acceptable parameters or not.”[774]

On the other hand, in the case of performance-based or principles-based regulation, it is not necessarily as clear whether enforcement action is warranted. In a performance-based regulation, as where the requirement in our example reads “an operator must ensure that emissions from a smoke stack do not contain particulate matter ‘y’ in concentrations that may pollute the immediate environment”, how is the regulated party to know if the “immediate” environment is being “polluted?” Moreover, all emissions produce pollution. The issue, though, is how much pollution should be tolerated. Likewise, in the principles-based regulation where the requirement reads “an operator must operate in a manner that is environmentally sound”, how is the regulatee to know if the operations are “environmentally sound?” Other issues may arise, such as those involving causation: the regulated party’s actions may not be the sole cause of the pollution, but a contributing cause of it. To what degree must the regulated party cause the pollution in order to warrant prosecution or other enforcement action? There may also be the need for expert evidence to substantiate the party’s responsibility for the pollution, or to interpret technical data from test results or other scientific processes. In short, evaluations of conformity by regulators may be “fluid and abstract”, instead of  “concrete and unproblematic.”[775]

Given that these regulatory strategies may create “less certainty about whether an offence has been committed”, warnings and more cooperative approaches, including negotiation, might seem preferable to the more formal measures of investigation and prosecution.[776] Indeed, in some cases, a return to prescriptive standards may be warranted. Violations which are of a technical nature may be “overlooked” in exchange for agreements to devote resources into practices or technologies that are aimed at addressing the “larger problems”; indeed, even “clear violations” might be tolerated where they are not of a serious nature, or it seems that the regulated party is making genuine efforts to become compliant.[777] Moreover, as Hawkins observes, what “risk” means to a regulator may change at certain times, and be viewed at different points in different ways.[778] Regulatory objectives may “change over time.”[779] The regulator may identify risk in a manifest way and “redress harms when they occur”; conversely the approach may to “obscure risk” and seek to make the public “feel sanguine about the risks that are obscured.”[780] But incentives to negotiate and cooperate within the regulated industry may equally be undermined if it appears that enforcement is not a viable option.

Black and Baldwin put forth the concept of “really responsive regulation”, having regard to the fact that regulatory powers are not always “clear” and there may be limited legal powers available to the regulator.[781] Indeed, it may be difficult to evaluate the success or failure of a regulatory strategy, and even if it is possible to do so, it may prove “very difficult to improve the regulatory system by adjusting enforcement strategies and legal powers.”[782] According to the authors, the “really responsive regulator” should not be confined to one particular strategy of enforcement, much less to enforcement as the ‘control method of first choice.”[783] However, a failure to provide “clear objectives” may make it “extremely difficult to state what ‘compliance’ involves.” [784] For Gunningham, who proposes the approach of “smart regulation” in preference to “responsive regulation”, given that the latter may be limited due to individual instruments not being designed to facilitate responsive regulation or because of there being “no potential for coordinated interaction between instruments”, the regulated party does not interact with state regulators only, but rather with a number of parties who employ different instruments in order to achieve compliance.[785]

Accordingly, when a court is considering what sentence to impose on the regulated party who has failed to meet the requisite compliance standard, it must have regard to these changing regulatory strategies. After all, the reformulation of the regulatory requirement may have played a role in the offender having difficulty in meeting the regulatory goal. Conversely, failure to achieve regulatory compliance with standards, which are prescriptive and detailed, may be indicative of an institutional “attitude” of lack of commitment to compliance that requires re-orientation. Nevertheless, the offender appears before the court, in both these instances, at one particular point of the regulatory cycle, and is most likely to be permitted to resume his/her regulated activity. The court, in turn, should look both forwards and backwards at the conduct of the regulated party. Past attempts at compliance and the offender’s response to non-adversarial enforcement entreaties are germane to sentencing; the future relationship between the regulated party and the regulator is also a relevant consideration.[786] That is, the court should be mindful of the fact that, following its involvement in the matter, the parties are likely to continue dealing with each other in the same regulatory endeavour. 

In essence, then, the question for the court at the sentencing stage is whether it can “enhance the cooperative model of enforcement and assist offenders to move to the next stage of compliance?”[787] To put the matter another way, taking into account the past relationship between the regulated party and the regulatory authority, how will the sentence imposed by the court impact on the parties’ ability to move forward and resume a non-adversarial, cooperative working relationship. A successful compliance strategy, even if it emerges at the time of sentencing, has as much “symbolic significance” as one arrived at earlier during the course of the regulatory cycle.[788]

6. Conclusion

There is a danger for courts and regulators to operate at cross-purposes. While the roles of these respective institutions are clearly different, and each is properly concerned with distinct tasks and goals, they deal in common with a regulated party who has failed to act in compliance with the regulatory standard. Whereas regulators are proactive in nature and may have instituted a prosecution as a tool of last resort, while courts react to the record placed before it and must impose punishment where it has been established that the regulatee’s conduct exhibited a lack of reasonable care or due diligence, both regulators and courts interact, in common, with a regulated party during the course of the regulatory cycle.   

However, a failure by the court to take into account at the time of sentencing, that is, at a crucial juncture in the regulatory cycle, that the offender has been subject to regulatory strategies that may have evolved over time, or did not meet standards that may not be clearly articulated, risks undermining the regulatory objective being enforced. It is also important for the court to be aware of the “penalties principles” that inform the sanction it is being asked to impose. These considerations are important because the offender will usually be permitted to resume his/her involvement in the regulated activity, and thus continue to engage the regulatory cycle, following the imposition of punishment by the court.

In short, courts have an important role to play as partners in the regulatory cycle. The penalties that are imposed by courts cannot be determined in a vacuum without regard for how they will operate within the regulatory context. The goal of furthering the regulatory objective, at the time of sentencing, will be better appreciated by the court by viewing the offender at one particular point in the regulatory cycle, as opposed to at the end of the process, so as to successfully reintegrate the regulated actor within the regulatory regime.      

The identification and provision of sentencing purposes and principles for regulatory offences thus enhances the ability of courts to select the sanction that best encourages the regulated actor’s successful reintegration within the regulatory cycle. A sentencing rationale or guiding purpose which promotes furthering the regulatory objective would help focus the court’s choice of sanction in order to hold the offender accountable for his/her conduct, as well as ensuring that the offender will maintain compliance with the regulatory standard in the future. Consequently, the concept of the regulatory cycle has an important role to play in the current debate respecting the identification and enactment of a statement of sentencing purposes and principles for regulatory offences.

B. Sentencing Purposes and Principles for Regulatory Offences: a New Approach for Regulatory Justice

1. Introduction

A statement of sentencing purposes and principles for regulatory offences is desirable for a number of reasons. These include providing certainty as to what such sentencing purposes and principles are, and promoting uniformity in approach by removing the matter from courts on a default basis. Another is to enact sentencing purposes and principles in a transparent manner by the same legislative body which has responsibility for enacting the public welfare legislation for which the courts are asked to interpret and impose punishment, as opposed to leaving the matter for judges to decide, based on the circumstances of a particular case. Further, a “sentencing rationale” provides “the foundation for solutions to unwarranted variation” since it makes known “what are the grounds for imposing penal sanctions and the principles governing the sentencing process.”[789]

All of these considerations, it may be said, are aimed at eliminating the problems caused by uncertain and unstructured sentencing practices, which effectively make sentencing for regulatory offences a game of chance. This is the antithesis of regulatory justice. Instead, a new approach is required for identifying and enacting sentencing purposes and principles for regulatory offences. Otherwise the sentencing jurisprudence for regulatory offences will continue to resemble a lottery, where inconsistency and unpredictability abound, as illustrated in the matrix of workplace safety, consumer protection and environmental regulation sentencing decisions within Canada, set out in Part III.

Were a sentencing rationale to be formulated for regulatory offences, courts, and the parties appearing before them, would doubtlessly be guided by it. This is not to say that a statement of sentencing purposes and principles would be a panacea, as the discussion in Part II with respect to the statement of sentencing principles under the Criminal Code[790] clearly demonstrates. However, it is better to know what the legislators’ stated and intended sentencing goals and aims are for regulatory offences, than not knowing this. As Manson comments, there can be nothing wrong with including a statement of purpose for sentencing, as opposed to failing to articulate one [791]

The relationship between the regulatory cycle and sentencing purposes and principles for regulatory offences has been described in the previous section. As Verhulst observes, once the court “understands the regulatory context”, namely, the regulatory strategies that are appropriate to the standards governing the conduct of the regulated party, as well as the “penalties principles” that informs the choice of the sanction being sought by the regulator, the court will be in a better position to determine the sentence it should impose.[792] The court’s punishment or sentence, in turn, should be designed to give effect to the regulatory goals of the legislators which are set out in the legislation.

It now falls to be determined how these regulatory offences sentencing purposes and principles should be identified and set out. To this end I turn first to the recently enacted British Columbia Public Health Act,[793] which provides a model for how a statement of sentencing purposes and principles for regulatory offences might be set out by legislators. This is followed by a discussion as to the importance of prioritizing sentencing purposes and principles for regulatory offences. These purposes and principles of sentencing are then specified, including, in order, remedying the harm or potential for harm, rehabilitation, general deterrence, and denunciation. I next discuss the desirability of setting out these purposes and principles of sentencing in a statute of general application, in Ontario the Provincial Offences Act,[794] as opposed to a statute which does not apply to other regulatory legislation within the jurisdiction, as is the case with British Columbia’s Public Health Act.  Consideration is also given to whether such a statement of sentencing purposes and principles should apply to all regulatory offences, or only to those where sentencing dispositions such as imprisonment, probation and elevated fines are available, as opposed to minor offences governed by a ticketing procedure. Finally, concluding observations are made as to the utility of sentencing purposes and principles for regulatory offences, particularly in furthering the role courts play in the regulatory cycle.

2. The British Columbia Public Health Act: A Model of Sentencing Purposes and Principles for Regulatory Offences enacted by Legislators

Verhulst proposes that the British Columbia Offence Act,[795] which is the equivalent legislation to Ontario’s Provincial Offences Act,[796] should be amended to specify five considerations or “sentencing steps” for courts to consider, in order, when determining what punishment to impose for breach of a regulatory statute. By providing these measures in a provincial offences statute of general application, the sentencing provisions would apply to all provincial offences legislation in the province, as opposed to being limited to the particular statute, which is currently the case with statutes such as the British Columbia Public Health Act,[797] or the Canadian Environmental Protection Act,[798] these statutes setting out sentencing provisions which do not apply to other Acts. The desirability of specifying sentencing purposes and principles in a statute of general application will be discussed in more detail below.

The “sentencing steps” which Verhulst advocates are the following:

1. encourage joint submissions on aggravating and mitigating factors, and the sanctions to be imposed (the “Friskies Schedule”);[799]

2. to the extent it is possible and reasonable, impose a sanction that remedies the violation (remediation);

3. if it is likely that the offender will continue to engage in the regulated activity after sentencing, but the offender’s behaviour must change to prevent future violations, impose a sanction that promotes the necessary changes (rehabilitation);

4. if it is appropriate in the circumstances and would likely have social value, impose a sanction that will promote change in the behaviour of other persons (general deterrence);

5. if aggravating circumstances make it appropriate, impose a sanction that denounces and punishes the offender’s behaviour (punishment).

The requirement that courts approach regulatory offences sentencing decisions by considering these factors, in order, would result in sentences which are, Verhulst contends, responsive to the “regulatory goals of the legislators.”[800] This approach also takes into account the unique relationship between the regulator and regulated party, at the time of sentencing, where both previous attempts at compliance and future efforts to do so, are relevant and should be reflected in the disposition crafted by the court.[801] The sequential order of sentencing principles, as set out in the “steps”, also ensures that there is a principled progression in the court’s analysis, and the sanctions which may be imposed.

A statute which provides a model for this approach is the recently enacted British Columbia Public Health Act.[802] In its sentencing provisions, criteria for determining sentence[803] and purposes of sentencing[804] are specifically set out, with a view to identifying sentencing principles which are appropriate for regulatory offences, having regard to the regulatory cycle. These sections read as follows:           

Determining sentence

105(1) Before imposing a sentence, a sentencing judge may request a joint submission from the offender and the prosecutor setting out any agreement on

(a) the circumstances that should be considered by the sentencing judge as either mitigating or aggravating the offence, and

(b) the penalty to be imposed.

(2) In determining the appropriate sentence, the sentencing judge must consider, in accordance with the regulations, circumstances that aggravate or mitigate the offence.

(3) In determining the appropriate sentence, a sentencing judge must

(a) consider the purposes of sentencing set out in section 106 [purposes of sentencing], and

(b) to give effect to those purposes,

(i) first, consider as a penalty one or more of the orders that may be made under section 107 [alternative penalties], and

(ii) second, consider whether a fine or incarceration under section 108 [fines and incarceration] is also necessary. 

Purposes of sentencing

106(1) In imposing a sentence, a sentencing judge may impose one or more penalties that, in order, achieve the following:

(a) first,

(i) if harm was caused, remedy the harm or compensate a person who remedied or suffered the harm, including the government, or

(ii) if no harm was caused, acknowledge the potential harm or further the regulatory objective underlying the provision that was contravened;

(b) second, if the offence was committed in relation to a regulated activity or other activity that the offender is reasonably likely to continue to engage in, rehabilitate the offender.

(2) In addition to a penalty imposed under subsection (1), a sentencing judge may impose one or more penalties under subsection (3) or (4), unless it would be disproportionate to the offence, given the offender, the nature of the offence and the total of the penalties imposed under this section.

(3) A sentencing judge may impose a penalty for the purpose of achieving general deterrence if the sentencing judge reasonably believes that the additional penalty would have a deterrent effect, including because

(a) the penalty imposed under subsection (1) is inadequate to address the circumstances related to the offence, or

(b) the nature of the penalty may

(i) assist others similarly situated to the offender to avoid committing a similar offence, or

(ii) educate others similarly situated to the offender respecting the seriousness of the offence.

(4) A sentencing judge may impose a penalty for the purpose of punishing the offender if

(a) the offender committed the offence knowingly or deliberately, or was reckless as to the commission of the offence, or

(b) sufficient aggravating circumstances exist that the offender should be punished for the offence.

These provisions are complemented by sections that specify “alternative penalties”,[805] which are designed to “give effect to the purposes of sentencing”. These “alternative penalties” include the following: paying a person an amount of money as compensation for the cost of remedial or preventive action taken by or on behalf of the person as a result of the commission of the offence;[806] performing community service for up to three years;[807] complying with any conditions that the court considers appropriate for preventing the person from continuing or repeating the offence or committing a similar offence under the Act;[808] where the person is a corporation, designating a senior official within the corporation as the person responsible for monitoring compliance with the Act, or regulations under the Act, or the terms or conditions of a licence or permit held by the corporation under the Act;[809] developing guidelines or standards in respect of a matter, implementing a process, or doing another thing, for the purposes of preventing the person from continuing or repeating the offence or committing a similar offence;[810] publishing, in any manner the court considers appropriate, the facts relating to the commission of the offence and any other information that the court considers appropriate;[811] posting a bond for an amount of money that the court considers appropriate for the purpose of ensuring compliance with a prohibition, direction or requirement under the section;[812] and submitting to inspections so as to permit a person specified by the court to monitor compliance, for a period of up to three years, with an order made under the section.[813]

The remaining sections under Division 3, which governs sentencing under the Act, address fine levels and length of imprisonment for offences,[814] as well as stating the factors to take into consideration for imposing a fine “in a lesser amount that the sentencing judge considers appropriate,” due to the offender’s inability to pay.[815]  There is also a provision for applying to the court to vary an order made under s.107 respecting alternative penalties.[816] A mechanism exists, in addition, for recovery of penalties under s.107.[817]

3. Identifying and Prioritizing Sentencing Purposes and Principles for Regulatory Offences

There is much to be said for the approach proposed by Verhulst, and exemplified by the British Columbia Public Health Act. [818] Purposes and principles of sentencing which are appropriate for regulatory offences are identified and enumerated in a sequential order for courts to consider, and implement, in their dispositions. The hierarchy of such principles is important, as it answers the often made criticism of the Criminal Code[819] statement of sentencing principles and purposes under s.718, namely, that merely listing sentencing objectives in a “smorgasbord approach,” provides no direction as to the priority to be attached to competing principles, or how the court is to choose as between them.[820] However, by ranking in priority “the concerns that may be at some point conflicting”, courts are provided with a mechanism “to resolve dilemmas arising from the need to consider competing principles.”[821]  A “progression in regulatory approaches,” as expressed through sentencing purposes and principles, is therefore essential.[822]

In terms of the content of these sentencing purposes and principles generally, Verhulst’s approach is consistent with the jurisprudence which recognizes both the “special approach” that is required when imposing punishment for breaches of the regulatory standard, such as in the area of protection of the environment, where remediation of the harm done, and rehabilitation measures, are especially important considerations,[823] as well as the factors of general deterrence and denunciation in sentencing for regulatory offences, as stated in cases such as the Ontario Court of Appeal’s decision in Cotton Felts Ltd.[824] Indeed, environmental offences, while said to merit a “special approach”,  have also been described as constituting “paradigmatic examples of regulatory offences.”[825] For all manner of regulatory offences, then, a premium is rightly placed on measures which obligate the responsible party to remediate the harm, or potential for harm, he/she causes, given one’s voluntary participation in the regulated activity. This also prevents the party from benefiting from any non- compliance, or having the incentive to do so, by failing to meet the regulatory standard.[826] In short, a sentencing rationale which is set out along these lines accords with what should be the reality of the sentencing process for regulatory offenders, and therefore meets the goals of “clarity, consistency and realism”.[827]

(i) remedying the harm or potential for harm

The placing of priority on the sentencing principle that a regulatory offender must first remedy the harm or potential for harm he/she causes, is to effectively extend the “polluter pays” principle, that is, where polluters are assigned “the responsibility for remedying contamination for which they are responsible” and have imposed on them “the direct and immediate costs of pollution”,[828] to regulatory offences violators more generally. Thus, a party breaching the regulatory standard, whether in the area of consumer protection, workplace safety or environmental regulation, should, firstly, repair any harm he/she causes, through the making of restitution or compensation to the aggrieved party or victim, including the regulatory authority or government.

The use of restitution in this manner has been described as an “ideal measure” since it “personalizes the offence by inviting the offender to see his or her conduct in terms of the damage and injury done to the victim.”[829] Restitution has also been described as a “rational sanction”: it underlines “the larger social interest inherent in the individual victim’s loss” which is “reaffirmed through restitution to victim,” while also working “towards self-correction, and prevents or at least discourages the offender’s committal to a life of crime”, such that the community “enjoys a measure of protection, security and savings.”[830] Stated simply, a sanction which is aimed at remedying “the harm caused by regulatory non-compliance,” where it is appropriate to do so, addresses the “needs of victims” while ensuring that regulatory offenders “take responsibility for their actions and its consequences.”[831]

There is a further reason why remedying the harm done, or potential for such harm, merits primacy as a sentencing consideration for regulatory offences. It is in keeping with restorative justice principles.[832] Restoring the victim to the position he/she was in prior to the commission of the offence constitutes an important goal of the overall sentencing process. Restorative justice is a means of repairing harm done to victims and communities; it also promotes the goal of making offenders feel accountable for their conduct, and acknowledging responsibility. Such considerations are recognized as purposes and principles of sentencing under the Criminal Code.[833] Restorative justice principles are particularly appropriate for regulatory offences, given the nature of such conduct and its potential to impact the community at large when there is a failure to meet the regulatory standard, while providing the court with an opportunity to encourage the regulated party to make amends for its actions.[834]

(ii) rehabilitation

The next priority in the sentencing purposes and principles paradigm emphasizes rehabilitation. As Verhulst explains, sanctions which are designed to rehabilitate the offender are appropriate, not as a matter of course, but only where it is likely that the regulated party will continue to participate in the regulated activity following the imposition of punishment.[835] This sentencing principle reflects the unique nature of the regulatory cycle for regulatory offences offenders: the sentence meted out by the court does not usually conclude the party’s involvement in the regulated endeavour; hence, courts should craft dispositions that will encourage the party to meet the regulatory standard in the future. Put another way, sanctions should be aimed at changing the offender’s behaviour, such that he/she “moves back into compliance.”[836]

At present, fines remain the usual penalty for failure to meet the regulatory standard.[837] They are intended to “eliminate any financial gain or benefit from non-compliance.”[838] However, such sentences are punitive in nature, and do not operate as catalysts to “change attitudes or long-term behaviour”.[839] Indeed, having offenders promote compliance is likely to be more effective at changing behaviour than merely imposing fines.[840] It is also problematic to rely on a process “of attaching a monetary value in sentencing.”[841] A fine which is set too low may be viewed be as being “simply worth the price” of the violation to gain a business advantage; a fine which is set too high may have the undesirable effect of dissuading “lawful business efficiency.”[842] In short, financial penalties may not always send the right message: fines which fail to act as a deterrent may actually provide an incentive for others “to fail to comply in return for a profit.”[843] This is the antithesis of creating a “compliance culture.”[844]

On the other hand, rehabilitative measures may be effectively put in place by court orders such as probation, which constitutes a mechanism for allowing persons who have been found guilty of an offence to “be given an opportunity to rehabilitate themselves, without being sent to prison, through the supervision of probation officers and the convicting court.”[845]  There is authority under the Provincial Offences Act of Ontario to place persons convicted of provincial offences on probation.[846] As is the case under the Criminal Code probation provision,[847] probation under the Provincial Offences Act is considered an appropriate sentencing disposition “having regard to the age, character and background of the defendant, the nature of the offence and the circumstances surrounding its commission.”[848] Where probation is imposed, the party is not only required to follow the conditions or terms set out by the sentencing court in the order, but additionally faces a penalty for failing to do so.[849] In the case of regulatory offences, terms of probation may be imposed to not only “address the cause of non-compliance” with the regulatory standard, but also to “instill long-term behavioural change.”[850] These measures, as Archibald et al observe, provide a “welcome change” in comparison to the “monetary quantifications required by a fine.”[851] Hence, the “principal virtue of probation” has been said to be “not in probation itself, but in the contrast which it provides to the inflexibility of imprisonment, and the impersonal nature of the fine.”[852]

Indeed, changes made by Bill C-45[853] to the Criminal Code in 2003 respecting the use of probation for “organizations”[854] found guilty of criminal offences are considerably broader than those terms which may be imposed for individuals convicted of criminal offences who are placed on probation.[855] By way of example, the organization may be required to establish policies, standards and procedures to reduce the likelihood of the organization committing a subsequent offence,[856] and to communicate such policies, standards and procedures to its representatives.[857] Other terms authorize the organization to be required to report to the court on the implementation of these policies, standards and procedures,[858] and to notify the public of the offence of which the organization was convicted, the sentence imposed by the court, and any measures that the organization is taking to reduce the likelihood of its committing a subsequent offence.[859]

These terms are essentially rehabilitative in nature, and demonstrate the utility of courts commencing the sentencing analysis for regulated actors by giving primacy to the consideration of “restorative and remedial remedies first”, prior to progressing to “the notion of deterrence.”[860]  This is not to say, as Archibald et al observe, that the principles of remediation and rehabilitation will necessarily be given precedence over the principles of deterrence and denunciation. Rather, the focus of the court should first be on restorative and remedial measures.[861]

The utility of rehabilitative measures for corporate offenders convicted of regulatory offences has been questioned by commentators such as Swaigen and Bunt in their study paper for the Law Reform Commission of Canada.[862] As the authors comment, while corporations “can be coerced or pressured into changing policies and practices and revising systems and structures,” the “central purpose” of the corporation is profit; hence, “how can you ‘cure’ the corporate compulsion to show a profit?”[863] In the words of another scholar, when a corporation is punished, there is “no soul to damn” and “no body to kick.”[864]

It is to be acknowledged that corporate offenders are different from individual offenders: while some sanctions, such as fines, may be imposed in both cases, in other instances this is not possible, as in the case of the use of imprisonment since the corporation has no liberty interest. However, this is not to say that rehabilitative sanctions are inapplicable for corporate offenders. Indeed, the Criminal Code organization sentencing provisions[865] reflect these differences, and recognize, through measures such as s.732.1(3.1)(f)) which allow the judge to require the organization to inform the public about the conviction, sentence and procedures adopted to prevent the offence from recurring, that “the public and customers may play an important role in influencing and monitoring corporate behaviour.”[866] Hence, there are sentencing factors that can be devised to further rehabilitative initiatives by corporate offenders. Examples set out in the Criminal Code organization provisions include directing the sentencing court to take into account any penalty imposed by the organization on a representative for their role in the commission of the offence;[867] any restitution that the organization is ordered to make or any amount that the organization has paid to a victim of the offence;[868] and any measures that the organization has taken to reduce the likelihood of it committing a subsequent offence.[869]

There are many examples of regulatory offences probation orders being imposed by courts on corporations for the express purpose of rehabilitation. In General Scrap Iron and Metals Ltd., [870] Watson J., as he then was, observed that the imposition of probation in the case of corporate offenders, and the potential for subsequent breach proceedings, constitutes an effective means of elevating the “level of social supervision of corporations”, having regard to the fact that the “entity being sanctioned is not the entity being spoken to by the sentence disposition.”[871] Indeed, where the recurrence of the breach of the regulatory standard is “real”, the court may consider that a probation order is more effective than a fine, since probation may be used to require the corporation to expend funds to improve its monitoring systems, as well as providing funds to alleviate the damage “both known and unknown” that it has caused.”[872]

Similarly, in R. v. Panarctic Oils Ltd.,[873] the court noted that while a fine would reinforce the principle of deterrence, a probationary order would provide the defendant with “the opportunity that it requests to rehabilitate itself.”[874] Probation also provides the means to require an offender to prepare a report proposing a remedial action plan and timetable concerning the lands it has polluted,[875] or making a contribution towards forest maintenance and restoration, as part of a probation order, which the court considered to be “a reasonable, even laudable, remedy for the harm done.”[876] Indeed, it has been recently held by the Ontario Court of Appeal in Ontario (Minister of the Environment) v. Quinte-Eco Consultants Inc.[877] to be a proper use of probation to impose a term that the offender not engage directly or indirectly in the business of environmental consulting, under the authority of the Provincial Offences Act so as to “to prevent similar unlawful conduct or to contribute to the rehabilitation of the defendant.”[878] The Court considered that the condition was “both rehabilitative in nature and served the purpose of preventing similar unlawful conduct, even though it may have had a punitive consequence.”[879]

Other creative uses of probation have included terms requiring the corporation to fund a program to assist householders in ridding themselves of toxic waste, publish on the front page of their newsletter details of the conviction and penalties and terms of probation, prepare a technical advisory circular on the topic of toxic waste storage, place a caution on the land to warn future purchasers of the environmental damage caused, and a condition that it make environmental issues a mandatory agenda item on all Board of Directors’ Meetings during the term of the probation order.[880] It has also been suggested that the court could order an “imbedded auditor” within a convicted corporation, so as to allow regulatory inspectors to monitor the company’s compliance for a set period of time.[881]

(iii) general deterrence

The next step in the sentencing calculus involves consideration of the principle of general deterrence. While remedial and rehabilitative measures may be sufficient to achieve the regulatory objective, it should not be assumed that this will be the case in all instances. Indeed, a sanction which is designed to change the behaviour of others may be particularly apposite where a “systemic problem exists throughout a regulated industry,” and the sentence of the court would demonstrate that “failure to achieve certain standards will not be tolerated.”[882] Given the nature of the offence, and the circumstances of the offender, remedial and rehabilitative sanctions may simply be insufficient, and an “additional penalty” may be required to convey to the regulated community that the penalty imposed by the court will not merely constitute the “business-cost for non-compliance.”[883] Through the principle of general deterrence, courts can “send a message to other players in the industry.”[884]

The Ontario Court of Appeal in its Cotton Felts Ltd. decision, explained the operation of the general deterrence principle in relation to offenders who breach the regulatory standard by stating that, in computing the quantum of fine, the controlling principle is that “without being harsh, the fine must be substantial enough to warn others that the offence will not be tolerated. It must not appear to be a mere licence fee for illegal activity.[885] Sanctions should therefore “signal to others within the regulated community that non-compliance will not be tolerated and that there will be consequences.”[886] There must therefore be a “deterrent effect” in the court’s sanction, when imposed to effect a change in the behaviour of others.[887]

Given that fines, as noted in Cotton Felts Ltd., are the disposition of choice for breaching the regulatory standard, it is important that there is an effective deterrent effect of such penalties when this sentencing consideration is implicated. Otherwise there will be the unintended result that such fines are regarded as merely the cost of doing business. A deterrent penalty must be intended to send a strong message that the risk of failing to achieve the regulatory standard will not be tolerated. To use the language of Professor Macrory’s “penalties principles”, such sanctions should ensure that there is no financial benefit obtained by non-compliance. [888] That is, it is important that there is no incentive to fail to meet the regulatory standard in order to make a profit.[889]

(iv) denunciation

Finally, the court may impose a sentence to emphasize the principle of denunciation for the purpose of punishing the regulated party. Verhulst contends that a punitive response will be justified where the offender commits the regulatory offence where there are “key aggravating factors”, such as “deliberate or reckless conduct.”[890] The British Columbia Public Health Act[891] employs similar language, providing that a penalty may be imposed for the purpose of punishing the offender where the party committed the offence “knowingly or deliberately, or was reckless as to the commission of the offence,”[892] or “sufficient aggravating circumstances exist.”[893] In Verhult’s view, while most regulatory offences do not require proof of negligence or intent, the presence of “deliberate or reckless conduct” merits punishment.[894] Indeed, conduct of this nature may constitute “key aggravating factors.”[895]

It is to be acknowledged that while mens rea is not usually a constituent element of regulatory offences, its presence places the offender on a similar footing to one who commits a criminal offence, and therefore merits greater punishment. As Madigan J. explained in R. v. Virk,[896] where there is a mens rea element in a regulatory offence, and thus some degree of moral blameworthiness or fault, this has “significance for sentencing” and should be reflected in the court’s disposition, since such offences are “much more serious and therefore more comparable to criminal offences than to public welfare offences.”[897]

Care must be taken, though, not to unduly limit the legitimate sentencing principle of denunciation to only those cases where there is knowing or deliberate or reckless conduct on the part of the offender. Most regulatory offences by definition involve negligence (strict liability), while others may preclude a fault element altogether (absolute liability). Consequently, it will be few regulatory offences that incorporate the elements specified by Verhulst, and will thereby be deserving of punishment. Indeed, the Supreme Court of Canada in the Sault Ste. Marie decision took into account “the virtual impossibility in most regulatory cases of proving wrongful intention” as a justification for recognizing strict liability as a middle ground or “half-way house” between offences involving mens rea and those of absolute liability.[898] The vast majority of regulatory offences, following Sault Ste Marie, have been interpreted, in fact, as strict liability offences, that is, as offences of negligence where there has been “negligent violation of statutes.”[899] Moreover, those public welfare offences that do contain a mens rea element, as Archibald et al observe,[900] are likely to qualify for prosecution under the Bill-45 Criminal Code negligence provisions for organizations.[901]

In any event, the sentencing principle of denunciation may seem particularly appropriate in strict liability offences where the defendant has failed to exercise reasonable care, and as a result a death has occurred on the work site, or a serious spill has polluted a town’s water supply. These are offences which may be as likely the result of a failure to put in place sufficient compliance systems, or to train employees adequately, or to properly gauge the foreseeability of an event from happening, as opposed to knowing or deliberate or reckless conduct on the part of the regulated party. This is not to say that actual harm is required so as to justify punishment. Endangering public health, or failing to care for vulnerable persons under one’s supervision, may be sufficient to merit a penalty for the purpose of punishing the offender. Accordingly, it would seem appropriate, as a sentencing principle for regulatory offences, to reserve denunciatory penalties for conduct which is sufficiently aggravating in nature, and may even justify prohibiting the offender from participating in the regulated activity for a temporary or permanent period of time. However, the bar must not be set so high that such punishment will be imposed in all but the most egregious of cases, and that for all intent and purposes courts are restricted to imposing denunciatory sentences for regulatory offences conduct which is, essentially, the equivalent of a criminal offence.

The use of denunciation as a sentencing principle for breaches of the regulatory standard is in accordance with the meaning of denunciation as a sentencing principle more generally. Denunciation is, in essence, “a communication process which uses the medium of language to express condemnation.”[902] In R. v. C.A.M.,[903] Lamer C.J., on behalf of the unanimous Court, stated in this regard:

The objective of denunciation mandates that a sentence should also communicate society’s condemnation of that particular offender’s conduct. In short, a sentence with a denunciatory element represents a symbolic, collective statement that the offender’s conduct should be punished for encroaching on our society’s basic code of values as enshrined within our substantive criminal law.[904]

Where the party’s failure to meet the requisite regulatory standard is such that a denunciatory sentence is appropriate, the court should impose a sentence on this basis. It may well be that the “culpability of the offender,” as opposed to the circumstances of the offence, provides sufficient aggravating features which are deserving of punishment.[905] Indeed, the “victim” of most regulatory offences will be “society as whole rather than a specific person.”[906] Still, there will be regulatory offences comprised of essentially negligent behaviour, as demonstrated in the matrix of sentencing jurisprudence in chapter 4, where it is appropriate to fashion a sentence which denounces societal unacceptable behaviour:  in the area of workplace safety, as in the case where a worker was killed in an explosion due to a radio miscommunication during a blasting operation, and the court fined the company $650,000;[907] in the area of consumer protection, as where convictions for misleading advertising, involving a fraudulent internet “yellow pages” business directory, where the revenues generated by the mail fraud scheme exceeded $1,100,000, resulted in jail sentences being imposed;[908] and in the area of environmental regulation, as where a defendant who had been convicted numerous times for violating anti-pollution by-laws, and was found in contempt of court due to violating an order made by a justice of the peace, was imprisoned for six months.[909]

The utility of imprisonment as a sanction for regulatory offences was recognized by Justice Cory in the Wholesale Travel Group Inc. decision.[910] He put the matter in these terms:

Regulatory schemes can only be effective if they provide for significant penalties in the event of their breach. Indeed, although it may be rare that imprisonment is sought, it must be available as a sanction if there is to be effective enforcement of the regulatory measure. Nor is the imposition of imprisonment unreasonable in light of the danger that can accrue to the public from breaches of regulatory statutes. The spectre of tragedy evoked by such names as Thalidomide, Bhopal, Chernobyl and the Exxon Valdez can leave no doubt as to the potential human and environmental devastation which can result from the violation of regulatory measures. Strong sanctions including imprisonment are vital to the prevention of similar catastrophes. The potential for serious harm flowing from the breach of regulatory measures is too great for it to be said that imprisonment can never be imposed as a sanction.[911] 

As can be seen, punishment or imprisonment is an important sentencing tool for regulatory offences. It is not linked, however, to knowing or deliberate or reckless conduct on the part of the offender, but, as Archibald et al note, to the “potential gravity of the adverse effect.”[912] As the authors go on to comment, this approach is “consistent with the foundation of regulatory offences in public welfare.”[913]

Verhulst does acknowledge that there will be cases where punishment or denunciation is justified for breaches of regulatory statutes, apart from cases involving intentional, deliberate or reckless acts. She cites, as examples of sufficient aggravating factors which merit such a “punitive response”, the offender’s failure to exercise due diligence “if it would have been simple or inexpensive to do so, or if the risks of harm were particularly high,” or the party’s “dismissive or obstructive attitude towards regulatory officials”, especially “if attempts have been made to suppress the offence or re-direct blame.”[914] These considerations would clearly constitute the requisite “sufficient aggravating circumstances,” so as to be deserving of punishment, under s.106(4)(b) of the British Columbia Public Health Act.[915]

Lastly, it should be noted that punishment or denunciation may involve an element of incapacitation to protect society, apart from the use of imprisonment. Incapacitation is achieved, primarily, through the use of custodial sentences.[916] However, in the context of regulatory offences, an incapacitation order will “generally prohibit the offender from engaging in certain regulated activities or acting in certain capacities temporarily (or even permanently).[917] As Verhulst observes, such sanctions are particularly effective for activities that require licences or permits to operate, but are not restricted to such operations.[918] For repeat offenders who have not been dissuaded by monetary penalties, incapacitation while severe, may nonetheless be appropriate.[919] There is a need for such sanctions when deterrence fails, and cooperative and remedial approaches have been exhausted; in the regulatory enforcement pyramid, the ultimate sanctions are licence suspension and licence revocation.[920] Without recourse to these incapacitation sanctions, when all else fails, the enforcement pyramid cannot be effective.[921]

4. Sentencing Purposes and Principles in a Statute of General Application

The British Columbia Public Health Act’s provisions with respect to punishment appear in the context of a discrete regulatory law statute, and not one of general application for all regulatory offences, as would be the case with a similar provision pertaining to punishment purposes and principles in the British Columbia Offence Act[922] or Ontario’s Provincial Offences Act.[923] It may well be appropriate, as a matter of statutory drafting, to word a provision broadly for ease of application to other provincial statutes, in much the same way that the Criminal Code[924] statement of statutory sentencing purposes and principles is set out,[925] which applies to other federal statutes creating offences. There is a presumption of coherence and consistent expression, such that statutes enacted by the legislature that deal with the same subject are presumed to be drafted with the other in mind, and not to contain “contradictions or inconsistencies.”[926] Indeed, statutes which deal with the same subject matter are to be interpreted with reference to each other, to ensure that they operate harmoniously.[927]

However, it is preferable that a statement of sentencing purposes and principles should be placed in a provincial offences statute of general application, so that these principles are transferable, and may therefore be applied uniformly to all other statutes containing offences in the jurisdiction. Otherwise, a court lacks the power to make an order that is authorized under one statute, but not another. In Ontario, the vehicle for setting out a statement of sentencing purposes and principles that applies to other provincial statutes is the Provincial Offences Act.[928] If it is thought desirable to do so, it is open to the legislators to craft additional sentencing principles to apply to a particular statute, should a purpose or principle, such as denunciation, be considered to merit primacy for breaches of a particular regulatory standard. Another approach, which is available, is to set out additional sentencing considerations that apply to particular regulated parties, following the model provided by the Criminal Code probation provisions for organizations only.[929]

An illustration of the type of issues that arise where provincial statutes contain sentencing considerations, which are not of general application, is illustrated by the Ontario Regulatory Modernization Act, 2007.[930] This Act sets out a provision stating that where a person has a previous conviction under the same or another statute, it should be regarded by the court as an “aggravating factor”[931] which may be used to justify “a more severe penalty.”[932] The inclusion of aggravating factors in one statute, as opposed to an Act of general application where sentencing considerations are grouped together and organized, has the potential to make it more difficult, if not confusing, for the parties, including courts, to be aware of the relevant sentencing purposes and principles, and to apply and prioritize them in a consistent manner. Of course, it remains open for a statute to set out additional aggravating factors on sentencing, depending on the manner of the commission of the proscribed act, or the conduct of the offender.[933] There may also be enacted a statement of sentencing purposes and principles specific to the particular statute, with reference to the statute of general application.[934]

The Ontario Court of Appeal’s decision in Serfaty[935] provides an illustration of the application of such additional sentencing provisions. In upholding penitentiary sentences imposed for a mail fraud scheme involving an Internet Yellow Pages business directory that generated over $1.1 million, contrary to the Competition Act,[936] the Court noted that a number of the circumstances in the case qualified as aggravating factors under s.380.1 of the Criminal Code,[937] respecting punishment for fraud, which had been enacted as part of the government’s recent corporate crime initiative.[938] These factors were stated to be the following: (1) the value of the fraud committed exceeds one million dollars[939] –  this amount was exceeded in the case; (2) the offence adversely affected, or had the potential to adversely affect, the stability of the Canadian economy or financial system or any financial market in Canada or investor confidence in such a financial market[940] – the Court found that the nature of the misleading invoice scheme forced business people to scrutinize every invoice for fraud, thereby “undermining consumer and business confidence in the marketplace;”[941]  (3) the offence involved a large number of victims[942] –  it was stated that there were hundreds of thousands of victims; and (4) in committing the offence, the offender took advantage of the “high regard in which the offender was held in the community”[943]-  the accused were found to have traded on a “known brand”, and the deceit was “compounded” as the brand was not their own.”[944]  This Code provision, then, provides an illustration of aggravating circumstances peculiar to an offence, “without limiting the generality” of the sentencing principles that are stated to operate more broadly.[945] Indeed, it is even stated that the court should not consider, as mitigating factors, a list of considerations, such as the offender’s employment, employment skills or status or reputation in the community “if those circumstances were relevant to, contributed to, or were used in the commission of the offence.”[946]

5. Sentencing Purposes and Principles for All or Some Regulatory Offences

An issue that does arise with respect to enumerating a statement of sentencing purposes and principles in a statute of general application, such as the Ontario Provincial Offences Act, is that the Act differentiates between ticket offences under Part I, where there is a maximum fine level of $1,000, and no possibility of imprisonment or use of probation,[947] in contrast to Part III proceedings, where the Act authorizes the use of imprisonment and probation, a general penalty of $5,000, and other sentencing dispositions.[948] The question which therefore may be posed is whether a statement of sentencing purposes and principles should reflect these differences, and be limited in its application to the more serious Part III proceedings only, or whether such a sentencing statement of purposes and principles should be applicable to all manner of proceedings under the Act, notwithstanding these procedural distinctions.

There are arguments that may be fashioned, with some force, in support of excluding a statement of sentencing purposes and principles from the Part I ticketing procedure. The provisions under Part I allow for proceedings which are not permitted under Part III, such as default convictions where the defendant fails to respond to a ticket,[949] or fails to appear at trial;[950] Part I also permits re-openings and the striking out of the conviction by a justice of the peace, following a finding of guilt, where it is not the defendant’s fault that he/she was convicted without a trial.[951] It is consistent with such provisions, it might be said, that a statement of sentencing purposes and principles should be inapplicable to Part I proceedings, since these Part I procedures do not apply, in turn, to the trial and sentencing provisions under Part III of the Act. Moreover, sentencing provisions which are set out under Part III, such as imprisonment and probation, are inapplicable to Part I proceedings.[952]

It may further be contended that if fines are the only available penalty under Part I of the Act, and minimal ones at that, at least for the most part, there is no practical need for a guiding rational on sentencing for courts, given that such dispositions will almost always be imposed. Indeed, the amount of many such fines is determined at the time the offender is charged, that is, “set fines” are imposed by the court.[953] Further, the statement of purpose under the Provincial Offences Act, which refers to “a procedure that reflects the distinction between provincial offences and criminal offences,”[954] might be said to be consistent with a statement of sentencing considerations not applying to those offences which are most unlike criminal offences, that is, ticket offences under Part I of the legislation, as opposed to Part III offences which, in common with criminal offences, are initiated by sworn information. 

On the other hand, there are a number of arguments which may be marshaled in support of a statement of sentencing purposes and principles applying to all proceedings under the Provincial Offences Act, despite the procedural differences and other distinctions between Part I and Part III of the legislation. To begin, it is not infrequently the case that offences which are the subject of a Part III proceeding, such as careless driving under the Highway Traffic Act (Ont.),[955] might be charged under Part I, where, for example, the provincial offences officer considers that the nature of the infraction does not justify the laying of an information, and exposing the defendant to a greater penalty and the more formal Part III procedure. The opposite is also true. The officer might decide to lay a charge under Part III for an offence which is usually prosecuted under Part I, such as speeding,[956] in order to have the matter accompany a more serious offence which is committed at the same time, such as driving while suspended.[957] In either case, the disposition of the court most likely to be imposed is a fine, in accordance with the Cotton Felts Ltd. decision,[958] regardless of whether the offence is charged under Part I or Part III of the Provincial Offences Act. A deterrent or exemplary monetary penalty may thus result, notwithstanding how the proceeding is conducted; conversely, the court may decide to impose no fine at all, as where there are extenuating circumstances that justify this penalty option.

In exercising its discretion to determine the amount of any fine, or vary a monetary penalty that is predetermined, that is, a “set fine”, courts should approach the matter on a sound and principled basis, including the determination as to whether or not to raise or lower the fine, and by what amount. For example, an offender who comes before the court for the first time and accepts responsibility for his/her conduct, may be contrasted with one who has a previous record for the same offence, and lacks remorse.  On what basis would a court determine the appropriate financial penalty, and distinguish between these two cases, if a statement of sentencing purposes and principles did not apply under Part I of the Act? It is the penalty amount that is impacted by the mode of procedure, not the underlying sentencing considerations. To preclude sentencing purposes and principles from applying if the matter is treated as a ticket offence, but not if charged by an information, thus seems an arbitrary distinction.

Moreover, it is the case with many offences under the Criminal Code that the prosecutor has an election as to the applicable trial procedure, which impacts, in turn, upon the available penalty and manner of trial which follows. If the election for such offences is by way of summary conviction, as opposed to indictment, in which case lesser penalties apply, the prosecutor’s election evidences its view as to the seriousness of the charge. However, it does not result in the Criminal Code purposes and principles of sentencing provisions not applying to such offences, merely because the Crown considers that the summary mode of procedure will suffice for punishment or other purposes, such as a more expeditious hearing of the matter.

In the context of the Provincial Offences Act, if a statement of sentencing purposes and principles did not apply to all manner of regulatory offences, the mode of procedure would become the determining factor with respect to the applicability of such sentencing purposes and principles. That is, the question as to whether or not there was a statement of purposes and principles applying to a sentencing hearing would depend upon the nature of the proceedings, as opposed to the unique character of regulatory offences themselves. This would inevitably give rise to unpredictability and disparities in treatment of offences and offenders, and undermine the intended goals of certainty and consistency that the enactment of a statement of sentencing purposes and principles for regulatory offences is designed to achieve. It would also produce the anomalous result that the same basic rules of procedure and admissibility of evidence would apply to all manner of provincial offences trial proceedings, but not sentencing hearings. In short, it would create a large body of offences for which sentencing considerations would continue to be inapplicable, and perhaps foster a perception that such offences were less deserving of penalties being imposed on a principled basis. 

Therefore, the better view, on balance, is that a statement of sentencing purposes and principles should be enacted for all regulatory offences. This uniform approach has the advantage of being both principled and rational. The limitation of quantum of fine amount, or unavailability of other sentencing options, due to one mode of procedure, may properly be viewed as one factor for the court to consider on sentencing with regard to the seriousness of the offence, and the need, if any, for a deterrent penalty. It ought not, however, be used to preclude a principled approach from being taken to sentencing itself, merely because either imprisonment or a fine in excess of $1,000. is not an available sentencing option. Fines, even in minimal amounts, may trigger adverse consequences, as in the case of default of payment giving rise to suspension of a driver’s licence, or non-renewal of a permit due to an outstanding balance. Indeed, the fine ranges themselves may be expanded or increased, as recent amendments to the Provincial Offences Act demonstrate.[959] 

The impact that provincial offences have on the administration of justice in the province of Ontario was recently described by Chief Justice Bonkalo in her remarks at the Opening of the Courts in 2009. Noting that approximately 2 million charges had been brought before the Ontario Court of Justice, comprised of criminal cases, family law matters and provincial offences, of which the vast majority were provincial offences, she commented:

Many can be resolved quickly, some are complex, lengthy proceedings. Every one of them is important to the community and those directly affected by any case.[960]

It follows that there is no reason to think that a person, who comes before the court charged with a provincial offences ticket, would consider that such a matter is any less deserving of principled consideration, including on sentencing, than one who appears before the court under Part III of the Provincial Offences Act, or otherwise.

6. Conclusion

Regulatory offences are conceptually distinct from criminal offences, being offences that consist essentially of negligent conduct by a regulated actor who fails to meet the regulatory standard. Moral blameworthiness and fault are generally not required. Consequently, the sentencing principles and purposes which are appropriate for regulatory offences are not the same as those for true crimes. Nevertheless, it is essential that, as in the case of our criminal law, sentencing purposes and principles for regulatory offences are identified and stated by the legislators, such that there can be no doubt as to what such sentencing principles are, and what is the guiding rationale behind them.

The ordering of sentencing purposes and principles for regulatory offences has similarities to the structure of enforcement based regulatory pyramids, where actions which are persuasive and voluntary are first considered, before moving on to more coercive measures, including criminal prosecution, and ultimately licence suspension or revocation. Sentencing purposes and principles for regulatory offences should borrow from this model. Courts should first consider remedial and rehabilitative measures, such as restitution or probation, before moving to more punitive responses, such as fines and imprisonment. The ultimate weapon in the court’s sentencing arsenal, incapacitation, is the same as that at the apex of the regulatory enforcement pyramid: the power to suspend or prevent the regulated party from participating in the regulated activity. Stated simply, such an orderly and principled approach aims first at fostering a compliance culture; however, where more drastic steps are required, a culture change may also be sanctioned. These are the “penalties principles” that should illuminate regulatory justice.

It is thus not only important to enact a statement of such sentencing purposes and principles, but to arrange them into a hierarchical order so that courts may interpret and apply them in a coherent and logical fashion, to all manner of regulatory offences, regardless of the procedure by which they are brought before the court. Having regard to the regulatory cycle, and the unique nature of regulatory offences, this statement of sentencing purposes and principles should require sentencing courts to do, in order, the following:

1. impose a sanction that remedies the violation, where it is possible and reasonable to do so;

2. impose a sanction to rehabilitate the offender, so as to promote the necessary changes, where it is likely that the offender will continue to engage in the regulated activity after sentencing, but the offender’s behaviour must change to prevent future violations;

3. impose a sanction for general deterrence, so as to promote change in the behaviour of other persons, where it is appropriate in the circumstances, and would likely have social value;

4. impose a sanction to denounce, and therefore punish, the offender’s behaviour, where aggravating circumstances make it appropriate to do so.

It is only when courts approach sentencing on this basis, applying a statement of sentencing purposes and principles enacted by the legislators in these terms, that regulatory objectives will truly be furthered. By encouraging the regulated party and the regulator authority to cooperate at the time of sentencing, so as to agree upon the aggravating and mitigating factors, as well as the sanctions to be imposed, the court will put in a better position to further the regulatory objectives on sentencing. The first priority on sentencing should be remediation; it ought to be followed by rehabilitation. In this manner offenders will be “held responsible for past conduct and encouraged to change their behaviour to avoid future violations.”[961] General deterrence and denunciation are the next two sentencing principles: the former where “there is reason to believe that doing so would actually have value”, and the latter where it is warranted by the aggravating circumstances.[962] This approach, in simple terms, sets out and prioritizes the applicable sentencing purposes and principles for regulatory offences, and provides the courts with a clear rationale, aimed throughout, at furthering regulatory objectives, and hence, regulatory justice.

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