A. Sentencing Provisions Under the POA
Two areas of sentencing reform were proposed during our consultations: first, whether a statement of sentencing purposes and principles should be adopted in the POA, and second, whether the range of sentencing options available to the court should be expanded. We begin with a snapshot summary of the current sentencing provisions in Part IV of the POA and then an analysis of these two issues with reference to the regulatory pyramid discussed in Chapter III.
Under the POA, a maximum fine of $1,000 may be imposed where a person is convicted of an offence commenced under Part I. For Part III offences, the maximum fine is $5,000 unless a statute directs otherwise. Certain sentencing powers are limited to Part III proceedings, such as directing the preparation of a pre-sentence report and issuing a probation order. There is no general authority within the POA to order imprisonment as a sentence; such authority must exist in the offence-creating statute, although the POA creates several procedural offences where a term of imprisonment may be ordered (e.g., contempt of court can result in a fine of up to $1,000 or 30 days imprisonment). Where a statute authorizes imprisonment, the court may consider the time the person convicted already spent in custody and the imposition of a fine in lieu of imprisonment.
Upon conviction, a defendant is liable to pay court costs as prescribed by regulation, and a surcharge when a fine is imposed in respect of a Part I or Part III offence.
Fines are due and payable within 15 days after they are imposed. When a fine is in default, it may be enforced as a civil judgment by filing a certificate in either the Small Claims Court or Superior Court of Justice, which shall be deemed to be an order of that court for the purposes of enforcement. Other fine enforcement tools include a suspension of or refusal to renew a permit, license, registration or privilege where an Act authorizes the suspension or refusal to renew. The POA prescribes other enforcement tools, but as noted previously, they are not truly in force since by virtue of subsection 165(3) of the POA, they are not available to municipalities who have entered into transfer agreements with the Attorney General. They include the authority of a justice to issue an arrest warrant when a fine is in default and where other methods of fine collection have failed, and the authority of a justice to order a term of imprisonment for unpaid fines where incarceration would not be contrary to the public interest. We further note a Supreme Court of Canada decision that said genuine inability to pay a fine is not a proper basis for imprisonment. Where a person is unable to pay a fine, a justice may grant an extension of time, establish a schedule of payments, or in exceptional circumstances, reduce the fine.
A fine options program, authorized by the Act and established by regulation, permits the payment of fines by means of credit for work performed, although no such program is currently in effect.
B. Sentencing Purpose & Principles
1. Challenges Faced Without Prescribed Sentencing Purpose or Principles
The POA does not contain a statement of the purpose or principles of sentencing. The court has had to fill in the gap through case law. This approach has been criticized since the judiciary has had to make policy decisions on the priorities of sentencing, which is arguably a task better left to the legislature. Also, several cases with similar facts have had vastly different sentencing outcomes that are difficult to rationalize. Several have called for clear sentencing guidelines to promote consistency in sentencing and to assist the court in advancing the offence-creating statutes’ objectives. This is in contrast to the Criminal Code which expressly states the purpose and principles of sentencing applicable to criminal matters, and British Columbia’s Public Health Act which also contains sentencing principles for offences committed under that Act. Ontario’s Environmental Protection Act does set out aggravating factors to consider when sentencing environmental offenders, but it also lacks an overriding statement of sentencing purposes and principles. Thus Archibald, Jull and Roach conclude that sentencing provisions for Ontario’s regulatory offences “are a patchwork quilt that are in need of reform.”
Over the years, the court has established lengthy lists of sentencing principles for regulatory offences. It has considered and relied upon as many as 23 factors including the nature of the offence, the size, wealth, and nature of operations of the defendant, and the social utility of the defendant’s actions or business. This “shopping list” does offer guidance to the court, but it has not been wholly satisfying. For instance, it is not clear how the factors interrelate, if they should be considered aggravating or mitigating and what priority should be given among them. Furthermore, while the shopping list approach has been developed in trial courts of first instance, the Ontario Court of Appeal has rendered few decisions to guide lower courts during sentencing. One reason given for this lack of sentencing jurisprudence is the onerous threshold that must be met in order to appeal a sentence to the Court of Appeal.
The leading Court of Appeal decision on sentencing in regulatory matters is R. v. Cotton Felts Ltd. An employee was cleaning a moving machine when his arm was sucked into a machine’s rollers and crushed. His arm had to be amputated below the elbow. A regulation under the Occupational Health and Safety Act provides that a machine shall be cleaned only when motion that may endanger a worker has stopped. The defendant was convicted and given a $12,000 fine that was appealed. The Court of Appeal held that fines are typically used to enforce regulatory matters and that the primary determinant of the amount is deterrence:
To a very large extent the enforcement of such [regulatory] statutes is achieved by fines imposed on offending corporations. The amount of the fine will be determined by a complex of considerations, including the size of the company involved, the scope of the economic activity in issue, the extent of actual and potential harm to the public, and the maximum penalty prescribed by statute. Above all, the amount of the fine will be determined by the need to enforce regulatory standards by deterrence. [emphasis added]
The court further stated that while the fine should not be harsh, it should “not appear to be a mere licence fee for illegal activity.” The Court of Appeal has not issued a sentencing decision of general application like Cotton Felts in the more than 25 intervening years.
A number of writers take issue with Cotton Felts’ reliance on fines as the predominant sanction, and deterrence as the paramount sentencing principle for regulatory matters. They argue that other principles, such as remediation and rehabilitation, have an equal or even more important role in regulatory sentencing. They also call for additional tools beyond fines to implement this broader array of sentencing principles. Below we discuss principles of sentencing and other sentencing options that ought to be considered to enable courts to help promote regulatory goals.
2. Inconsistency in Sentencing Outcomes
Libman, in his research paper for the LCO on this Project, argues that Cotton Felts gives very little guidance and as a result there is a wide range of sentencing outcomes that are difficult to explain. He also questions the use of fines and the lack of other sanctions aimed at repairing the harm or rehabilitating the offender to promote future compliance with the regulatory statute. To illustrate his point, Libman examines several cases from Ontario and other Canadian jurisdictions, some of which we discuss below.
Examining workplace safety cases first, Libman references the R. v. Ellis-Don decision where the Ontario District Court reduced a fine imposed by a lower court under the Occupational Health and Safety Act from $20,000 to $10,000. A worker died after falling down an elevator shaft. On appeal, the majority of the Court of Appeal did not deal with the sentence because it ordered a new trial after addressing a constitutional issue, but the dissenting judge would have upheld the $10,000 fine. This would have resulted in a fine that was less than the fine in Cotton Felts, even though Ellis-Don involved a fatality and the defendant in that case was a major corporation. In another case, an employee received minor burns and others felt the impact after the boom of an excavator came into contact with live wires. The Court of Appeal approved fines against a small family-run business that totaled $35,000, far exceeding the fines awarded in Cotton Felts or Ellis-Don and where the injuries were much less significant than in these other two cases.
Even in cases with the same facts, different levels of court have difficulty determining the proper amount of a fine. In R. v. Inco Ltd., the defendant was a large mining company ultimately convicted of failing to maintain equipment in good condition and failing to leave a guard to protect workers from a moving part of equipment. This resulted in the death of an employee. The trial judge fined the company $250,000 per count on three counts. The Superior Court of Justice overturned one of the convictions and reduced the sentence on the remaining counts to $125,000 per count after revisiting the trial judge’s assessment of two factors applicable to sentencing. The Court of Appeal then restored the fine of $250,000 on the remaining two counts. Libman notes similar disparities in fine amounts from decisions in Alberta, Saskatchewan, New Brunswick and Newfoundland.
Sentences rendered in consumer protection cases can be equally difficult to explain. Libman cites R. v. Browning Arms Co. of Canada where the trial judge imposed a fine of $15,000 per count on four counts of ”resale price maintenance” for a total of $60,000. The court noted that a large total fine was required so that it did not amount to a “a mere licence to carry on.” The Court of the Appeal disagreed and imposed a fine of $2,500 per count for a total of $10,000. The result was that the total fine for all four counts was $5,000 less than what the trial judge would have ordered for each count individually. The case of R. v. Epson (Canada) Ltd. offers a further example. The trial judge imposed a fine of $200,000 for attempt to influence upwards the price by which distributors advertised the defendant’s products, but the Court of Appeal found the fine to be disproportionately high and reduced it to $100,000. And in R. v. Total Ford Sales Ltd., the Ontario District Court overturned fines ordered by a provincial court judge totaling $66,000 and replaced them with fines totaling $19,600 on the basis that the trial judge had not correctly applied certain sentencing factors. Again, the variance in the fines with the same facts supports the argument that greater guidance is needed in sentencing.
The third area examined by Libman is environmental offences. Although sentencing tools other than fines are more likely to be used for environmental offences, there is still considerable variation in the sentences handed down. In the case of R. v. Bata Industries Ltd., the Provincial Court imposed a total penalty of $120,000 for the unlawful discharge of toxic waste and a two year probation order. Half of the penalty was a fine and the remaining $60,000 was to fund the start-up costs of a local program designed to clean up domestic toxic waste, which was a term of the probation order. On top of Bata’s fines, two directors of the company were fined $12,000 each. The District Court on appeal reduced the total penalty to $90,000, resulting in $60,000 paid as a fine to the government’s Consolidated Revenue Fund and only $30,000 paid towards the local toxic clean up program. In addition, the fines for the individual directors were reduced to $6,000 each.
Clearly, the unique circumstances of a given case will result in different sentences being rendered, and therefore some disparity must always be expected. However, if sentencing is to be legitimate, “it should be based on a consistent and principled approach that aligns that part of the regulatory process with the underlying regulatory goals.” More defensible and principled sentences can be expected if the purposes of sentencing and prioritized sentencing principles are firmly established and not left entirely to judicial discretion. Moreover, it appropriately falls to the legislature to provide courts with the necessary tools to achieve the regulatory goals. As Libman notes:
…while the state of sentencing for regulatory offences in Canada may not be in “chaos”, it certainly appears that there is in the courts a lack of uniformity, and marked inconsistency in applying sentencing purposes and principles to such offences. Indeed, how could it be otherwise, one might wonder, given the absence of any legislative rationale or guiding principle in sentencing provisions for most regulatory offences.
Others writers have similarly argued that greater consistency in sentencing is needed and that legislation can play a role by providing a principled and consistent approach. Of key importance, legislation should ensure that sentencing aligns itself with regulatory goals. As stated by one writer:
Certainly, some disparity is to be expected. Fairness demands that courts tailor sentences to the circumstances of each offender and offence. If sentencing is to be legitimate though, it should be based on a consistent and principled approach that aligns that part of the regulatory process with the underlying regulatory goals. These may be categorized generally as the prevention or mitigation of harm, the enhancement of administrative efficiency or the achievement of a particular goal in the public interest.
3. Development of Sentencing Purposes and Principles Elsewhere
Sentencing purposes and principles adopted in other contexts offer a basis to consider whether similar reforms should be made to the POA. Various studies by the Law Reform Commission of Canada, Parliamentary Standing Committees, the Canadian Sentencing Commission and the Government of Canada each recognized the need to express sentencing principles in the Criminal Code. The Standing Committee on Justice and the Solicitor General conducted a review of sentencing and conditional releases and its 1988 report made the following comments on sentencing disparity in the criminal context:
Research on sentencing disparity demonstrates that the most frequently alleged cause for unwarranted variation is confusion about the purposes of sentencing. No sentencing goals are now set out in legislation. Conflicts and inconsistencies in case law appear to arise from the fact that it is often impossible to blend the elements of public protection, punishment, denunciation and deterrence; frequently, they are contradictory and inconsistent. It is important, therefore, to achieve consensus on a sentencing rationale for the guidance of the judiciary and the enlightenment of the general public.
This reform movement eventually led to the introduction of Bill C-41 which provided for “comprehensive sentencing reform”. As a result, the Criminal Code now contains express sentencing purposes and principles:
718 The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:
(a) to denounce unlawful conduct;
(b) to deter the offender and other persons from committing offences;
(c) to separate offenders from society, where necessary;
(d) to assist in rehabilitating offenders;
(e) to provide reparations for harm done to victims or to the community; and
(f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.
718.1 A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
Other sentencing principles
718.2 A court that imposes a sentence shall also take into consideration the following principles:
(a) a sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender, and, without limiting the generality of the foregoing,
(i) evidence that the offence was motivated by bias, prejudice or hate based on race, national or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or any other similar factor,
(ii) evidence that the offender, in committing the offence, abused the offender’s spouse or common-law partner,
(ii.1) evidence that the offender, in committing the offence, abused a person under the age of eighteen years,
(iii) evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim,
(iv) evidence that the offence was committed for the benefit of, at the direction of or in association with a criminal organization, or
(v) evidence that the offence was a terrorism offence
shall be deemed to be aggravating circumstances;
(b) a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances;
(c) where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh;
(d) an offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances; and
(e) all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of aboriginal offenders.
The Criminal Code provisions do not create a hierarchy of objectives or principles, nor does it otherwise provide guidance to the judiciary on how they are to be applied. In fact, this has been a source of considerable criticism. Despite these challenges, others have argued that the Criminal Code provisions are better than an absence of purposes and principles and that it brings some order to sentencing.
The Public Heath Act in British Columbia is another example of legislation that sets out purposes and principles of sentencing. Unlike the Criminal Code, it prioritizes sentencing principles and requires sentences that are first, remedial in cases where there has been harm; second, intended to rehabilitate where it is expected that the offender will continue to engage in the regulated activity; third, will serve as a general deterrent where the sentence under the previous priorities is insufficient and a further penalty can be justified to deter others; and fourth, to punish if the offence was deliberate or other aggravating circumstances justify punishment. The relevant sections are discussed in greater detail below.
4. Introducing Sentencing Purposes and Principles to the POA
Similar to the results of the research on sentencing disparity under the Criminal Code, there appears to be unwarranted variation in sentencing in POA matters. The patchwork of legislative provisions and the limited case law from the Court of Appeal have not filled in the legislative gaps. The rationale given by the Standing Committee for a consensus on a sentencing rationale in the criminal context is equally applicable in the regulatory context. Sentencing should have a principled basis to best promote regulatory objectives and a statement of principles in the POA can promote this.
Rather than simply adopt the Criminal Code sentencing principles, special attention must be given to the distinction between criminal and regulatory offences, and most notably, the “regulatory cycle” discussed previously. Simply put, it is the cycle by which a regulated party will engage in a regulated activity, a breach of a regulatory standard will be detected and resolved (e.g., warning letter, AMP, or prosecution with fine), and then the regulated party will typically resume in the regulated activity. They will continue to haul waste, drive their car, run a manufacturing plant or spread biosolids on a farm. Indeed, it is in the interest of society that the convicted person continues to carry on the regulated activity, but that they do so lawfully, rather than being prohibited from doing it altogether.
When a provincial offence has been committed, the court ought to recognize the regulatory cycle. It must look “not only backwards at the conduct which gave rise to the non-compliance, but forward as well, since the defendant will often continue to participate in the regulated activity following the imposition of punishment.” Therefore, when sentencing, the court ought to consider what response would best promote compliance in the future, “which is very different than the context in which criminal defendants are punished for engaging in anti-social or moral blameworthy behaviour.” This is the key distinction between sentencing in criminal matters versus regulatory ones, and it must be considered when developing sentencing principles for regulatory offences as well as how those principles interrelate.
To fully understand the regulatory cycle and its implications for sentencing, trends in regulatory enforcement must be considered. Regulatory standards are moving away from being design-based. Design-based regulations identify how an act is to be carried out and they are clear and direct (e.g. an operator must install a number 2 scrubber on each smoke stack). But design-based regulations have been criticized as being slow to adapt to changing technology and expertise, which may lead to impaired efficiency and innovation. A regulation that is too narrow or inflexible can unduly hamper effective operations. One report looking at the financial sector argues that such prescriptive standards fail to respond quickly enough to changes in the market, burden industry and have failed to prevent misconduct.
Design-based standards are being replaced with newer strategies including outcome-based, performance-based and principles-based regulation. These types of regulations have been distinguished as follows:
1. “Outcome-based” regulations provide for a measurable result to be achieved (e.g. an operator must ensure that emissions from a stack contain less than x parts per million of nitrous oxide);
2. “Performance-based” regulations provide for a non-measurable result to be achieved (e.g. an operator must ensure that emissions do not contain nitrous oxide in amounts that cause an adverse effect on the environment); and
3. “Principles-based” regulations establish standards of conduct (e.g. the operator must dispose of a dead farm animal in a manner that is environmentally sound).
While these newer strategies provide regulated persons with more operational flexibility, the latter two can create uncertainty around the regulated person’s precise obligations. The obligation to install a specified scrubber is a much more exact obligation than ensuring that an operation is run in an environmentally sound manner. When an uncertain regulatory standard is the subject of a prosecution, the sentencing court must consider the lack of certainty of the standard, whether the sentence can be used to assist the offender in determining what the regulatory standard requires, and how the sentence will help the offender to achieve that standard.
This shift in regulation strategies has led to less of an adversarial approach to enforcement, and a greater reliance on enforcement tools at the bottom end of the regulatory pyramid discussed in Chapter III. Warning letters, education and attempts to persuade by the regulator ought to be used before approaches at the top of the pyramid such as investigation, prosecution and licence suspension are invoked. When the court is sentencing it should consider any past attempts at compliance and the defendant’s response to those attempts. The court should also consider the effect of the sentence on the future relationship between the regulator and the regulated person. In all likelihood the regulator and the regulated party are likely to continue dealing with each and the court must consider whether the sentence might actually be used to enhance cooperative enforcement in the future. Libman sums it up as follows:
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.
After considering the new regulatory strategies, Sherie Verhulst argues that courts should adopt a five step inquiry when sentencing a matter under British Columbia’s Offence Act, which is that province’s equivalent of the POA. She proposes that the court:
1. Encourage joint submissions on aggravating and mitigating factors as well as the sentence to be imposed (“joint submissions”);
2. Impose a sanction that remedies the violation, to the extent that such a sanction is possible and reasonable (e.g. compensation, probation, community orders) (“remedial”);
3. If the offender is likely to continue to engage in the regulated activity after sentencing, but the offender’s behaviour must change to prevent future breaches, impose a sanction that promotes the changes necessary to prevent future violations (e.g. probation, community service) (“rehabilitation”);
4. Impose a sanction that promotes change in the behaviour of other persons, but only if the court believes that that it could serve a regulatory objective and where the remedial and rehabilitative sanctions are insufficient given the circumstances of the matter (e.g. community service, fines) (“general deterrence”);
5. Impose a sanction that denounces and punishes the offender’s behaviour if aggravating circumstances make such a sanction appropriate (e.g. punitive publicity orders, order to cease certain activities temporarily or permanently) (“denunciation”).
Verhulst’s approach envisages a clear hierarchy of principles for the court to consider when sentencing. This hierarchy has been praised as an improvement to the approach under the Criminal Code, which provides no priority and little guidance on how to apply its sentencing principles and purposes. This approach gives the court clear and helpful direction so that sentencing can occur in a more consistent and rationale manner, particularly when faced with competing sentencing principles.
The LCO agrees with the hierarchy of sentencing principles proposed by Verhulst. Libman notes that each individual step is well grounded in regulatory jurisprudence. Deterrence and denunciation are retained as traditional sentencing principles consistent with the Cotton Felts case, but now the principles of remediation and rehabilitation are expressly noted and they have a higher priority than deterrence. This is consistent with a contemporary view of regulatory law which envisages persuasion as a stronger motivator than punishment, and an enforcement regime that is flexible and responsive to newer regulatory strategies.
Verhulst and Libman offer persuasive justifications for each step. The first is the encouragement of joint submissions from the prosecutor and the defence setting out aggravating and mitigating factors as well as the sanction that they agree the court should impose. For complex matters that involve performance-based or principle-based regulation, this first step can be immensely helpful. The regulator and the regulated persons, each with expertise that the court may not possess, can propose a sentence that will further the regulatory objectives and that is also informed by the ability of the regulated person to comply with the sentence terms. One can expect more creative sentences that will advance greater compliance in the future. In addition, agreed-upon sentences promote a greater understanding of each of the parties’ positions that encourages improved cooperation between the two in the future. Joint submissions over purely court imposed punishment can also help promote future compliance. As noted by Ayres and Braithwaite,
When punishment rather than dialogue is in the foreground of regulatory encounters, it is basic to human psychology that people will find this humiliating, will resent and resist in ways that include abandoning self-regulation.
While joint submissions on aggravating or mitigating factors and the sentence to be imposed can be very helpful, it may not be practical in all POA cases. First, many parties who appear before the court, particularly on minor POA offences, will not be legally trained or will represent themselves, and for such parties, knowing what factors are aggravating or mitigating or the range of appropriate sentencing outcomes may not be possible. Second, even when a plea is entered, the parties will often not be able to agree on aggravating or mitigating factors and the court will have to determine whether such factors exist. For these reasons, we do not believe that agreement on aggravating or mitigating factors or a recommended sentencing outcome should be a requirement in all cases. Instead, we believe the court should simply be open to hearing any agreement on these issues that has been reached by the parties. Where a consensus on such factors is present, it will ensure that all of the relevant considerations on sentencing are before the court, and obviate the necessity for resolving factual disputes as to their application. Where the parties are unable to agree, the court will be required to resolve these factual issues in order to arrive at the correct basis for arriving at its sentencing decision.
Next, orders that remedy the harm done ought to be the first objective of any sentence rendered. Where a person voluntarily enters into a regulated area and creates harm as a result of unlawful conduct, common sense and fairness dictate that the harm ought to be remedied by the person who created it. Regulated persons should take responsibility for their actions through sanctions that are logically connected to the offence. Remediation is important because it attempts to restore victims to the position they were in prior to the violation and is consistent with restorative justice principles.
Tools such as compensation, probation orders and community service may be much more effective sentencing tools than fines when seeking to remedy harm, and the circumstances of the case may dictate that they be preferred over fines. Determining appropriate fines is often difficult and sometimes fines do not directly change the behaviour of the offender or satisfy regulatory goals. Fines can easily become a mere “cost of doing business”, and once collected in general government coffers, they may not be earmarked to remedy the harm that was created.
Remediation may be more difficult where there was no actual harm and instead, the achievement of a particular public interest goal has been undermined. Nonetheless, the court may be able to fashion a sentence that addresses remediation in these circumstances. For example, if an offender were responsible for a spill in a lake but there were no known immediate adverse effects, the court could require a long-term study of the toxic effects of the spilled materials. Similarly, if there were no injuries arising from toxic chemicals discovered in a nursing home, the court could order improved staff training on the use of toxic chemicals. These sentences would create a further benefit of requiring the offender to take a direct interest in furthering the regulatory goals.
After remediation, the court should consider rehabilitation of the offender. The court’s objective is to craft a sentence that encourages and assists the defendant meet regulatory standards in the future. Rehabilitation is appropriate where it is likely that the defendant will engage in the regulated activity after sentencing. Society’s interest will often lie in the person continuing to carry out this activity lawfully rather than the person not carrying it out at all, and therefore rehabilitative orders are preferred over licence suspensions or crippling fines. In the nursing home example, it is better that its doors are kept open in a manner that is safe for those who need assisted living, rather than it being shut down completely.
Research suggests that organizations go through three stages in complying with regulatory obligations. The particular stage that an organization finds itself should be taken into account by courts when fashioning rehabilitative remedies. The first stage is a commitment to comply. Second, the organization must learn how to comply. Third, it must institutionalize compliance through such means as standard operating procedures, performance appraisals and the organization’s culture. So, if the organization were in the second stage of compliance the court might order, as a term of probation, that certain employees take training to learn how to comply with regulatory standards. If it were in the third stage, the court might require the company to hire an expert to help it develop standard operating procedures that meet regulatory standards.
Probation is to be preferred over fines to achieve the goal of rehabilitation. Empirical evidence suggests that while fines deter certain types of behaviour, they do not change attitudes or long-term behaviour. We discuss below the need for broader authority in the POA for courts to impose probation since it can play a key role in implementing the sentencing principle of rehabilitation. Other tools such an “embedded auditor” also have the potential to further rehabilitation goals and it is discussed below.
Probation orders should be targeted at behaviours that help promote compliance. In Chapter III, we cited research that suggests regulated parties are often motivated to comply with regulatory standards, not because of a fear of a fine, but because of other factors. They include loss of reputation, a desire to do what is right, to be faithful to an identity as a law-abiding citizen, and to sustain a self-concept of social responsibility. These motivators ought to be the source of proportionate and custom-tailored probationary orders for regulatory breaches that promote compliance, rather than the imposition of a standard fine as the first response.
Fourth, the court should address general deterrence. Noting that general deterrence has been the primary focus of regulatory sentencing in the past, Verhulst argues that the pre-eminent status of this objective should now give way to other pressing sentencing principles for the following reasons:
(1) given the need to consider the effect of the totality of the sentence on an offender, an emphasis on deterrence leaves less room for remedial and rehabilitative measures, and, if regulatory objectives are to be achieved, those should have greater priority;
(2) research in both the criminal and regulatory law contexts strongly suggests that general deterrence, and, in particular, high penalties for this purpose, is not actually successful in changing long-term behaviour;
(3) it is unfair to punish one person for the sake of the anticipated sins of others; and
(4) the success of performance-based and principles-based regulation, and less adversarial enforcement strategies, relies on an assumption that most regulated persons largely act with goodwill rather than responding only to threats of formal sanction – imposing a sanction for the purposes of general deterrence conflicts with this assumption.
A penalty based on general deterrence should only be imposed if two conditions are both met:
First, if the court has reason to believe that the sanction would serve a purpose that is consistent with the regulatory objective; second, if the totality of the sentence would not be disproportionate, given any sanctions already imposed for the purposes of remediation and rehabilitation.
This approach is consistent with the regulatory pyramid. Where penalties at the lower end of the pyramid have been tried unsuccessfully, or where a lesser sanction would be vastly inadequate given the aggravating circumstances of a particular offender, a more severe penalty may well be appropriate. A sanction based on general deterrence might be justified, for example, where there is a systemic problem in the regulated industry.
In terms of the severity of the sanction, it must signal to the community that non-compliance will not be tolerated. We would broaden the explanation of general deterrence given in Cotton Felts Ltd. to include other types of sanctions beyond fines, but as was said in that case, the sanction imposed must warn others that the offence will not be tolerated without being harsh. On the other hand, the sanction must not appear to be a mere licence fee. Consideration should be given to whether a fine is in fact the most appropriate penalty since it may suggest “that the offender is simply buying their way out of trouble.” Probation orders or publicity orders advertising the offender’s offence and sanction may well be stronger motivators that promote compliance.
Finally, the court should only sanction to denounce if there are sufficient aggravating factors. A unanimous Supreme Court of Canada describes the objective of denunciation:
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.
In determining whether there are aggravating factors that warrant a denunciatory penalty, the court should focus more on the conduct of the offender rather than on the offence itself. Factors to consider would be deliberate or reckless conduct such as ignoring regulatory officials, repeated failures to act with due diligence, whether compliance with the regulation could have been achieved cheaply or easily, or if the risk of harm was high.
Denunciation may also be appropriate for an offence that has resulted in death or widespread and long-term impacts. However, actual harm, while relevant, should not be a prerequisite to the use of the denunciation penalty. For example, someone who deliberately endangers public health despite repeated warnings from regulatory officials may well merit a denunciatory sanction.
Verhulst also argues that denunciation should be used with restraint so there is more room for remedial and rehabilitative sanctions. Widespread use of denunciation would undermine non–adversarial approaches to enforcement. This is because severe responses from the courts, such as incarceration and the revocation of licences will make regulators less likely to use prosecution, which will ultimately undermine non-adversarial approaches that rely on a credible threat of more serious sanctions. This is in keeping with the research of Ayres and Braithwaite who found that regulated parties are more inclined to work cooperatively with regulators at the bottom of the pyramid, but where compliance is not achieved, denunciation through the use of a “big stick” must always be available in the background.
B.C.’s Public Health Act adopts an approach proposed by Verhulst and it may serve as a model for new sentencing purposes and principles in the POA. Sections 105 and 106 are reproduced below:
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:
(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), or both, 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.
For the reasons discussed above, we are persuaded that a new approach to sentencing is needed that would have general application to POA offences, unless the offence-creating statute directs that different or additional principles are to apply. We recognize that an offence-creating statute may prescribe a different set of sentencing principles that are specific to further the regulatory objectives, and these must always take precedence over general sentencing principles prescribed in the POA.
The sentencing principles proposed by Verhulst, endorsed by Libman, and as exemplified in B.C.’s Public Health Act with respect to that statute’s objectives, may serve as a sentencing model for regulatory offences governed by the POA. We recommend that such a model be adopted. As compared to the current “deterrence and fine” paradigm that has been a hallmark of POA sentencing for at least the past 25 years, the proposed new model is responsive, flexible, and is better suited to promote compliance with new regulatory strategies. It would be of general application and most helpful for those offences which offer no sentencing principles, but it would be subject to specific and potentially different sentencing principles expressly stated in the offence-creating statute. The proposed sentencing principles offer guidance to the judiciary so that sentences can be tailored to the different types of offences and offenders, and allows sentences to be more easily rationalized by appellate courts and among cases with similar fact situations.
Some expressed concerns about “demoting” fines and deterrence within the hierarchy of sentencing principle. POA prosecutors advised that, from their experience, fines are the “bottom-line” in controlling conduct of regulated parties. They would disagree with the studies that suggest factors other than fines motivate compliance. They told us that corporations feel the pinch of a substantial fine and watch closely to see how competitors are sentenced at POA prosecutions.
The use of fines as a sentencing tool will still be available and ought to continue to be used for deterrent purposes when the circumstances of a given case make clear that remedial or rehabilitative sentencing orders would not be effective at promoting compliance with the offence-creating statute’s objectives. Hefty fines authorized by statute would still be available and should continue to be ordered if they would be most effective in promoting compliance. The only difference with the introduction of sentencing principles is that a justice would first turn his or her attention to the preceding principles. The result may be costly remediation or rehabilitation orders, which might well impact the offending corporation’s “bottom-line” and competitiveness as much as a fine. Examples include costly environmental clean-ups, or orders to update or improve equipment to higher safety and environmental standards. In addition, the offending corporation may be ordered to pay a fine in addition to these remedial and rehabilitative orders. All that the hierarchy of sentencing principles requires is that due consideration first be given to the remedial and rehabilitative sentencing principles so that the consequences and causes of non-compliance can be addressed first, before turning to deterrence, but in all cases, any sentence rendered must be targeted at promoting compliance with regulatory standards.
Lastly, we do not propose that parties be required to make a joint submission on aggravating or mitigating factors or a recommended sentence. Many unrepresented litigants will not be able to come to agreement on aggravating or mitigating factors, or on an agreed sentence. Instead, we simply propose that parties be encouraged to do so when appropriate and that the court consider any such joint submission if made. The practical reality, we suspect, is that joint submissions may never occur in the most routine offences, although there may be cases where it might be valuable and helpful and we do not want to preclude this possibility. Indeed, joint submissions can be immensely helpful when sentencing the more serious offences that involve serious harm to individuals or might otherwise justify a denunciatory sentence. Therefore, we do not see the application of this step of the new sentencing principles as being onerous in comparison to its potential benefits.
5. Application of Sentencing Principles to Part I Offences
A final and challenging issue is whether the newly proposed sentencing principles should apply to all POA proceedings or just to the more serious matters now brought under Part III. Three key arguments have been made to treat Part I offences differently and not have them subject to the sentencing principles. They are:
· Proportionality – Maintaining the distinction between Part I and Part III offences. As the original drafters of the POA contemplated, a streamlined process ought to govern the less serious offences. This is consistent with the concept of proportionality that we have advocated, and it applies equally at the sentencing stage. Since 80% of Part I offences are Highway Traffic Act offences that are effectively dealt with through fines (and the demerit point system), the sentencing principles and in particular, a consideration of remedial and rehabilitation objectives will add an unnecessary level of complexity to otherwise simple and straightforward cases.
· Inefficiency in sentencing: An examination of the five steps in each Part I sentencing hearing can create inefficiencies, and unduly bog down the administration of justice, especially given the volume of Part I offences heard each year (1.9 M per year). While the sentencing principles may come to be considered quickly and routinely in all cases, to apply them properly, the sentencing justice must become familiar with the unique facts of each case. This may well take an undue and unnecessary toll on the efficient administration of justice.
· Majority of Part I offences arise from precise Design-Based or Outcome-Based regulations for which remedial or rehabilitative orders would have little utility. Most Part I offences are Highway Traffic Act offences that typically involves a breach of a precise and measurable standard (e.g., exceeding 100 km/hr; failing to wear a seatbelt; failing to stop). It is difficult to imagine remedial orders to repair harm or rehabilitate offenders for these minor offences. On the other hand, Part III offences arising from such things as injuries at work from inadequate safety training or environmental spills from inadequate precautionary planning may involve less precise regulatory standards. These offences would reap the most benefit from remedial or rehabilitative orders that seek to repair harm and prevent future breaches of regulatory standards.
The arguments in favour of having the sentencing principles applicable to both Part I and III charges are:
· Remedial and Rehabilitative Orders will be More Effective if made Early for Some Part I Offences: The court should not have to wait until a more serious charge is laid under Part III and after greater harm has been caused before being able to impose a remedial or rehabilitative order to prevent future breaches. It is in the interest of the legislation’s objectives that remedial and rehabilitative orders be made early. For example, an employer convicted of an Occupational Health and Safety offence under Part I that resulted in little or no harm to employees may benefit from a probationary term with conditions requiring the employer to eliminate the work hazard so that the likelihood of future harm is reduced or eliminated. It would not serve the objectives of the legislation if the court had to wait until more serious harm resulted and a charge was brought under Part III before ordering probation with terms that would reduce or eliminate the risk.
· Need for Sentence that is Responsive to the Offence and the Offender for Some Part I Offences: For some Part I offences, the circumstances of the offence or the offender may justify a sentence beyond the standard fine. For example, a fine may not prove to be an effective deterrent for a driver who has had several previous Highway Traffic Act convictions. An offender may lose his licence because he has accumulated the requisite number of demerit points arising from previous convictions. The offender, however, requires his car to drive to work, and his income is necessary for spousal or child support. As an alternative, the court may consider a creative disposition so the offender does not lose his licence but which would help promote compliance with legislative objectives (e.g., conviction of lesser offence with probationary term that offender take a driver safety course, or that he only be permitted to drive to and from work).
· Need for Sentencing Principles for Part I Offences: If the sentencing principles do not also apply to Part I offences, there would be no sentencing principles applicable. The demand for sentencing principles in Part I offences is no less than it is for Part III offences. As Libman notes, “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.” As noted, a rehabilitative or probationary order for less serious Part I offences may often be required to keep the regulated party’s conduct in check so that it does not reoffend with potentially more significant consequences. If the sentencing principles only apply to Part III offences, the court’s opportunity to impose a meaningful “corrective” sentence early would not be available.
We have duly considered these arguments. We conclude that the sentencing principles should be used by the court as guidelines when sentencing Part III offences, subject to other or different sentencing principles prescribed in the offence-creating statute. With respect to Part I cases, we are concerned about overly complicated sentences with broad reaching probationary terms for the most minor and typical offences. We are also concerned about system inefficiencies that may result should the court turn its mind to the sentencing principles and circumstances of each case. And we also agree that Part I and Part III sentences should be treated differently. The POA endorses different approaches for commencing Part I and Part III offences which we think should carry through to sentencing, given the objective of proportionality and balancing the process with the interests at stake.
However, different treatment does not mean that the sentencing principles should never apply to some Part I cases. From the examples noted above, the unique circumstances of some cases or the potential for recurring harm might demand a remedial or rehabilitative sentence. There will always be the unique Part I cases where the usual, simple and straightforward sentence (i.e., fine) will not achieve the legislative objectives given the circumstances surrounding the offence or the offender, or address the potential for more serious harm should the offence reoccur. Those cases may be identified by the defendant or the prosecutor (e.g. cases of multiple convictions of the same offence; risk of more serious harm in the future), or the court on its own initiative may identify the case as one where a rehabilitative, remedial or denunciatory sentence is appropriate and necessary in the interests of justice. The message the POA should convey is that, as a general rule, the court need not apply the sentencing principles to all Part I offences, but flexibility should be built in for creative and responsive sentences for Part I offences where necessary and appropriate.
The LCO recommends that:
19. The POA be amended to provide a statement of sentencing principles of general application that shall be used by the court as guidelines when sentencing offences commenced under Part III, subject to other or different sentencing principles or provisions prescribed in the offence-creating statute.
20. Where necessary given the unique circumstances of a case and the interests of justice, the court may consider the sentencing principles for Part I offences and render a remedial, rehabilitative or denunciatory sentence where appropriate.
The statement of sentencing principles should includes the following five hierarchical steps:
(i) Parties should be encouraged to submit joint submissions on aggravating and mitigating factors as well as the sentence to be imposed (“joint submissions”);
(ii) Impose a sanction that remedies the violation, to the extent that such a sanction is possible and reasonable (“remediation”);
(iii) If the offender is likely to continue to engage in the regulated activity after sentencing, but the offender’s behaviour must change to prevent future breaches, impose a sanction that promotes the changes necessary to prevent future violations (“rehabilitation”).
(iv) Impose a sanction that promotes change in the behaviour of other persons (e.g., dissuade others from committing the same or similar offence), but only if the court believes that that it could serve a regulatory objective and where the remedial and rehabilitative sanctions are insufficient given the circumstances of the case (“general deterrence”);
(v) Impose a sanction that denounces and punishes the offender’s behaviour if aggravating circumstances make such a sanction appropriate (“denunciation”).
C. Sentencing Tools
The POA’s current sentencing provisions are too limited to allow courts to properly implement the sentencing principles and purposes recommended in the previous section. Too much of an emphasis is placed on fines, without regard to other sentencing options which inhibit sentences that best promote regulatory objectives. In order for courts “to craft the most appropriate sentence”, it is essential that there be “a wide variety of sentencing options.” “[C]ourts will not be able to play an effective role in the regulatory cycle unless they are given the sentencing tools with which this may be done.” Most notably, if the court is to implement the sentencing principles recommended in the previous section, it must have the necessary sentencing tools to give effect to them.
It is beyond the scope of this project to canvass all potential sentencing options that might be appropriate for all provincial offences. Instead, our discussion focuses on additional tools that ought to be introduced in the POA that may have application across all regulatory statutes.
1. Probation Orders
The POA allows the court to make a probation order in a proceeding commenced by information, provided the offence is not one of absolute liability. Subsection 72(2) of the POA deems probation orders to contain certain standard conditions and subsection 72(3) allows the court to prescribe four additional types of conditions but only in narrowly prescribed circumstances. These circumstances, in our view, are too restrictive to permit the courts to implement the sentencing principles of remediation and rehabilitation.
First, under clause 72(3)(a), compensation or restitution may only be ordered as a condition in a probation order where it is authorized by an Act. This means that compensation and restitution can be ordered for some regulatory acts in Ontario, but not others. Given the prioritization of remediation as a sentencing principle, a sentencing mechanism must be available to give effect to this principle. We note that there are many offences for which there is no harm (e.g., many offences brought under Part I); however, this should not preclude the general availability of a remedial sentence for those offences in which harm has occurred. Ontario appears to be lagging in this regard, as general procedural Acts in other provinces provide broad powers to make restitution or remediation orders.
Second, clause 72(3)(b) allows the court to prescribe community service, but only for an offence that is punishable by imprisonment and only where the defendant consents to the order. The rationale for this limitation appears to originate from a view that community service is an intrusion into the liberty interests of the offender, and therefore, should only be available as an alternative where imprisonment is a permitted penalty. However, legislation in other provinces permits the imposition of community service and its availability is not subject to the defendant’s consent or the offence being punishable by imprisonment. Also the view that community service is only an appropriate alternative to imprisonment is no longer true. It may be an effective alternative to a fine where an offender would be unable to pay a fine, and where it can “further the offender’s rehabilitation through taking responsibility for the wrongful act, or to acknowledge the offender’s impact on a victim.” While community service requires time that arguably intrudes on the offender’s liberty interests, other probationary terms can similarly create mandatory time obligations (e.g. reporting to a probation officer or educating staff on workplace safety). Moreover, it is less of an intrusion on liberty interests as compared to total incarceration where imprisonment is a permitted penalty under the offence-creating statute. In order to limit the impact on an offender’s liberty interest, we recommend the hours and duration of community service be limited in the POA as is done in other jurisdictions.
And finally, clause 72(3)(c) permits probation conditions to be imposed relating to the circumstances of the offence and defendant that contributed to the commission of offence in order “to prevent similar unlawful conduct or to contribute to the rehabilitation of the defendant”, but only where the conviction is of an offence punishable by imprisonment. Rehabilitation, as a sentencing principle, can apply to all offences. The restriction on offences punishable by imprisonment unduly hampers the court’s ability to promote compliance with regulatory statutes where imprisonment is not a permitted penalty. If we are to allow courts to craft appropriate rehabilitative sentences for all offences, this restriction can no longer be justified and we believe it must be eliminated.
2. Alternative Penalties
Several regulatory statutes provide courts with a wide variety of sentencing powers that permit the court to impose a sanction that is beyond the typical penalty of a fine, probation or imprisonment. Known by many names such as “alternative penalties” and “creative sentencing measures”, a number of them could prove to be immensely helpful in the POA context to help achieve regulatory objectives across a broad spectrum of regulatory regimes.
One example is found in British Columbia’s Public Health Act. Section 107 provides for a large number of orders including the power to order community service for up to three years and to pay compensation for the cost of a preventative or remedial action. It also allows the court to order a corporate defendant to designate a senior official within the corporation as the person responsible for monitoring compliance with the Act or its regulations, or the terms or conditions of any licence or permit held by the corporation under the Act. Another interesting power allows the court to order the defendant to post a bond in an amount the court considers appropriate for ensuring compliance with a prohibition, direction or requirement issued under the alternate penalties section. These orders can be used to further remediation and rehabilitation goals.
A different source of “creative sentence” orders is found in the Fisheries Act. Section 79.2 states that the court can, taking into account the nature of the offence and the circumstances surrounding its commission, make an order containing one or more listed prohibitions, directions or requirements. The directions include compensating the Minister for remedial and preventative actions taken and the posting of a bond to ensure compliance with an order under this section. Further, it permits the court to direct the person submit to the Minister information respecting the activities of the person that the court considers appropriate.
The Criminal Code allows the court to order restitution and compensation as part of a free standing order or as an optional condition in a probation order to compensate victims of crime. Neither option is currently available under the POA. Provincial offences legislation in other jurisdictions authorize compensation as a sentencing remedy for persons aggrieved due to loss or damage to property caused by the defendant, which may be enforced in civil courts in the event of non-payment. An advantage of a free standing restitution order is that it may be enforced as a civil judgment, whereas restitution as a term of a probation order is enforceable only during the currency of the probation order and after that, only if breach proceedings are initiated. Restitution or compensatory orders are intended to repair harm done to victims or the community and to promote a sense of responsibility in offenders and to have them acknowledge the harm to their victims and the community. They would appear to be a helpful enforcement tool consistent with the recommended sentencing principles. They are also consistent with the principle of efficiency in that they eliminate the necessity of having to bring a separate civil proceeding for restitution on the same set of facts.
Authority to order an embedded auditor would be another useful sentencing tool in the POA. A court would order a government auditor, or a potential private auditor approved by the court, to be placed within a corporation to monitor compliance for a certain period of time. The corporation would be required to fully cooperate with the auditor, and it would pay his or her salary or fees during the compliance period. The scope of the auditor’s work could be limited to monitoring and reporting on the corporation’s compliance at intervals determined by the court, or the auditor could take on a proactive role in assisting the corporation to develop and implement improved compliance measures. We note, however, that government hiring and procurement practices may present some challenges to the effectiveness of this option, but we nonetheless recommend that it be an available tool.
In our view, many of the above-mentioned alternative sentencing penalties could be used to further the recommended sentencing principles and prove effective in achieving regulatory goals.
3. Victim Impact Statements
The POA, unlike the Criminal Code, does not codify the right of a victim of an offence to file a victim impact statement. The Criminal Code contains provisions allowing the victim of a crime to file a detailed statement, in a prescribed form, of the harm or loss suffered by the victim as a result of the commission of the offence. The victim also has the right to read the statement into the court. Although certain courts have used victim impact statements in POA proceedings, no clear right to do so exists. Instead there is uncertainty surrounding the authority to permit such statements and who should be able to submit such evidence and in what form (e.g. oral or written submissions).
A victim impact statement can be a valuable tool in POA proceedings. In addition to giving victims a voice in the proceeding, such statements would provide the court with necessary information to permit it to fashion appropriate compensatory or rehabilitative sentences. We were told, anecdotally, that some Aboriginal victims have had difficulty being able to make victim impact statements. While there may be other reasons for this (e.g., cultural barriers), expressly codifying the authority to use victim impact statements would help promote their use in appropriate cases, regardless of the nature or race of the victim.
We see this tool as being used primarily for more serious provincial offences, as the less serious offences tend not to involve “victims”. However, we do not wish to limit access to victim impact statements only to the more serious proceedings. There may well be instances where the court could benefit from hearing from victims in order to fashion appropriate remedial or rehabilitative sentences. One example may be a neighbourhood plagued by litter or noise arising from a local business. While the littering offence or noise by-law that has been infringed may be seen as a minor offence, the community may have a strong interest in providing the court with its views on the impact that repeated violations have had so that an appropriate sentence may be fashioned. In practice, the presiding justice should retain authority to decide whether or not victim impact statements may be considered by the court after giving due consideration to the circumstances surrounding the offence and any harm caused.
4. Alternative Measures
Alternative measures refer to a form of post-charge diversion whereby the Crown withdraws a charge or the court dismisses a charge if the defendant has completed an agreed program of alternative measures. They are distinct from the “alternative penalties” discussed above, which only arise following a conviction and which serve as alternatives to a fine, probation or imprisonment. With alternative measures, there is no conviction. For example, a prosecutor may agree to drop a charge for speeding upon receipt of satisfactory evidence that the defendant has enrolled in and completed a driver safety course. When such programs are used properly, they can support efforts to rehabilitate a defendant while avoiding the time and expense of a trial.
Alternative measures are available under section 712 of the Criminal Code, but they can only be used where they are consistent with the protection of society and if a number of other conditions are met. The section also sets out circumstances where alternate measures are not permitted, restrictions on the use of admissions made by the defendant and rules around subsequent charges are also dealt within section 712.
There is no statutory basis for alternate measures in Ontario, although as of December 2009, we were told that some municipalities are offering such programs. If adopted in the POA context, amendments to the Act may provide for some oversight over these programs to ensure that they are effective and that they are appropriately used. Section 712 will provide a great deal of guidance in this regard. Part X of the Canadian Environmental Protection Act might also help in the development of POA provisions. Before recommending their adoption for minor POA offences, further consultation with municipalities and the provincial government must occur to ensure that appropriate administrative structures are in place to support diverting provincial offences to any existing or new alternative measure programs.
The LCO recommends that:
22. The POA be amended to confer broad authority on the court to make probation orders for all provincial offences in order to give effect to the remedial and rehabilitative sentencing principles. Permissible probationary terms that may be ordered by the court ought to include restitution and such other conditions that the court considers necessary and appropriate to prevent similar unlawful conduct or to contribute to the rehabilitation of the defendant, regardless of whether or not the offence is punishable by imprisonment.
23. The POA be amended to include community service as a possible term of probation where it would achieve remediation for any harm caused, contribute to the rehabilitation of the offender, or serve as an alternative to the payment of a fine where a defendant is unable to pay a fine.
24. The POA be amended to permit alternative penalties to be issued by the court. In particular, authority for free-standing restitution or compensatory orders that may be enforced in civil courts be expressly created, as well as authority to order an embedded auditor to promote compliance with regulatory standards.
25. The POA be amended to expressly permit the use of victim impact statements for offences in which harm has been caused, subject to a residual discretion in the court to decide whether or not to admit them after considering the seriousness of the offence and any harm caused.
26. After further consultation with municipalities, the Ministry of the Attorney General consider the adoption of alternative measure programs for less serious provincial offences.
D. Sentencing a Corporate (Business) Offender
So far, we have not made a distinction between individuals and corporations when sentencing. In fact, many of our examples have assumed a corporate defendant and that the sentencing purposes and principles would apply equally to individuals and corporations. We believe that this is the correct result even though it may challenge some of the traditional concepts we have about sentencing. Rehabilitation, for example, has traditionally been associated with restoring the morality of an individual, but how do you “cure” a corporation that is not a real person? Fines and remedial compensation orders are directly related to the “bottom line” and profit-making ability of a corporation and indeed its raison d’être, so how can non-monetary sanctions like probation orders be effective? The scope of regulatory activity in which corporations are involved demonstrates the imperative of effective regulatory sanctions, and we revisit research that shows what motivates corporations to comply with regulatory standards. We then examine whether corporation-specific sentencing provisions should be adopted in the POA.
Corporations and other business enterprises have a broad impact in our society. They are “the primary means of conducting business, employing the vast majority of workers, producing most of the economy’s goods and services, and purchasing many goods and services.” We want corporations to engage in these activities, but they may also commit offences. We unfortunately know the tragic consequences that can result to our public welfare when corporations fail to implement safety standards in the workplace, ignore securities regulations for the sake of profit, fail to properly test our water supply, or engage in business practices that create environmental disasters. Most corporate wrong-doing is not prohibited by the Criminal Code, but by numerous regulatory statutes governing activity in these fields. It is therefore essential that effective enforcement mechanisms be in place within provincial offence regimes to promote compliance with regulatory standards.
We have discussed how fines can be ineffective in promoting compliance. They can often become a cost of doing business that is passed on to consumers. Corporate structures can be deliberately set up as shells without assets so as to be shielded from paying fines, which further frustrates enforcement of regulatory regimes. While high fines may intimidate some corporations to act lawfully, they generally fail to address the root causes of regulatory non-compliance and they miss an opportunity to effect positive change in the corporation’s conduct. In fact, empirical research has shown that punishment can often inhibit compliance with regulatory standards; it insults the regulated actors and demotivates them. It fosters individual rebellion and the potential for a business subculture of resistance to regulation. On the other hand, factors that motivate compliance include loss of reputation, a desire to do what is right, to be faithful to an identity as a law-abiding citizen, and to sustain a self-concept of social responsibility. Sentencing orders that respond to these motivators may be much more effective in addressing the causes of non-compliance and in promoting future compliance.
Section 732.1(3.1) of the Criminal Code recognizes the principles of remediation and rehabilitation when issuing probation orders against an “organization”, which includes corporate and non-corporate entities. Paragraph (a) of section 732.1(3.1) allows for restitution to an injured person for any harm caused. Clauses (b) through (e) establish monitoring mechanisms to reduce the likelihood of the organization engaging in unlawful conduct in the future. Clause (f) permits the court to order that the organization notify the public of the offence and sentence. This type of order recognizes that “the public and customers may play an important role in influencing and monitoring corporate behaviour.” This is also consistent with studies that show regulated parties do not wish to lose a positive reputation and that they seek to do what is right and socially responsible. Section 732.1(3.1) reads:
(3.1) The court may prescribe, as additional conditions of a probation order made in respect of an organization, that the offender do one or more of the following:
(a) make restitution to a person for any loss or damage that they suffered as a result of the offence;
(b) establish policies, standards and procedures to reduce the likelihood of the organization committing a subsequent offence;
(c) communicate those policies, standards and procedures to its representatives;
(d) report to the court on the implementation of those policies, standards and procedures;
(e) identify the senior officer who is responsible for compliance with those policies, standards and procedures;
(f) provide, in the manner specified by the court, the following information to the public, namely,
(i) the offence of which the organization was convicted,
(ii) the sentence imposed by the court, and
(iii) any measures that the organization is taking — including any policies, standards and procedures established under paragraph (b) — to reduce the likelihood of it committing a subsequent offence; and
(g) comply with any other reasonable conditions that the court considers desirable to prevent the organization from committing subsequent offences or to remedy the harm caused by the offence.
We recommend the POA adopt a similar provision to expressly give the court the power to include remedial and rehabilitative terms within a probation order against a corporation or other business enterprise, whether incorporated or not. Such authority is necessary if the recommended sentencing purposes and principles are to be implemented by the court. In addition, the POA should permit a general power to impose further terms as found in clause 732.1(3.1)(g) of the Criminal Code to allow for the court to impose other creative terms that will promote compliance with the offence-creating statute’s objectives.
We note that many businesses that run afoul of regulatory standards may be operated by an individual, partnership or firm with a registered business name, but the business is not a corporate entity. For these business enterprises, the above noted probation terms could be equally effective in promoting compliance and we see no reason why they should not apply simply because the business has chosen not to incorporate. This is likely the reason why the Criminal Code provisions apply to an “organization” which term is defined very broadly to include corporate and unincorporated bodies, as well as other associations of people. We would not adopt the broad definition of organization in the Criminal Code, given its potentially significant scope. We do, however, recommend that probationary terms similar to those found in 732.1(3.1) be available to the court when sentencing a corporation and any other business enterprise, whether incorporated or not.
The next issue is whether the POA should list factors that the court must consider when seeking to punish a corporation or other business enterprise after it has considered the principles of remediation, rehabilitation, and deterrence. Clause 106(4)(b) of British Columbia’s Public Heath Act states that a sentencing judge may impose a penalty for the purpose of punishing if “sufficient aggravating circumstances exist that the offender should be punished for the offence.” The Act, however, does not list a set of aggravating factors. In comparison, section 718.21 of the Criminal Code lists considerations that a court must consider when sentencing an organization, but the list includes both aggravating factors (e.g. the degree of planning involved in carrying out the offence) and mitigating factors (e.g. measures taken to reduce the likelihood of it committing a subsequent offence). Therefore, it does not transplant well into our proposed POA sentencing model.
In our view, there is good reason to prescribe a non-exclusive list of factors that might justify a punitive or denunciatory penalty. First, it will put corporations and other business enterprises on notice as to the kind of conduct that may result in a punitive penalty. It will also reinforce the fact that a punitive response is not the first basis upon which a sentence is to be rendered; the court must first consider remediation, rehabilitation, and deterrence before considering aggravating factors that may justify a denunciatory penalty. Finally, it will respond to increasing expectations from the public that corporations and other businesses be held accountable for egregious conduct, with an assurance that they will be punished where aggravating factors have been established.
At this juncture, we do not recommend what the non-exhaustive list of aggravating factors should include, only that a list be developed. In discussing the type of aggravating factors that may merit a punitive response, Verhulst gives, as examples, 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.” Reference may also be had to section 718.21 of the Criminal Code, which, for example, includes as a factor attempts made by a corporation to conceal or convert assets to avoid paying a fine or making restitution. Case law on sentencing provincial offences will provide further guidance on other aggravating factors that merit a punitive response.
The LCO recommends that:
27. The POA be amended to confer power on the court to make a probation order against a corporation or other business enterprise, whether incorporated or not, with conditions modeled on section 732.1(3.1) of the Criminal Code regarding probation conditions for an organization.
28. The Ministry of the Attorney General, after consultation with the judiciary, prosecutors, defence bar and paralegals, develop a non-exhaustive list of aggravating factors to be included within the POA for the court to consider when ordering a punitive or denunciatory penalty against a corporation or other business enterprise.
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