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37th PARLIAMENT, 1st SESSION

Standing Committee on Justice and Human Rights

EVIDENCE

CONTENTS

Thursday, May 23, 2002

0930

0935

The Chair

Professor Poonam Puri (Individual Presentation)

0940

The Chair

Professor Anne-Marie Boisvert (Individual Presentation)

0945

0950

0955

The Chair

Mr. Cadman

The Chair

Prof. Anne-Marie Boisvert

The Chair

Mr. Louis Erlichman

1000

The Chair

Prof. Poonam Puri

Mr. Chuck Cadman

Prof. Anne-Marie Boisvert

The Chair

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ)

Me Anne-Marie Boisvert

1005

Mr. Mario Laframboise

The Chair

Mr. Louis Erlichman

The Chair

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC)

1010

Prof. Anne-Marie Boisvert

Mr. Peter MacKay

Prof. Anne-Marie Boisvert

1015

Mr. Peter MacKay

The Chair

Prof. Poonam Puri

The Chair

Mr. Paul Harold Macklin (Northumberland, Lib.)

Prof. Anne-Marie Boisvert

Mr. Paul Harold Macklin

Prof. Anne-Marie Boisvert

1020

Mr. Paul Harold Macklin

Prof. Anne-Marie Boisvert

Mr. Paul Harold Macklin

Prof. Poonam Puri

Mr. Paul Harold Macklin

Prof. Poonam Puri

Mr. Paul Harold Macklin

Prof. Poonam Puri

Mr. Paul Harold Macklin

Prof. Poonam Puri

The Chair

Mr. Louis Erlichman

1025

The Chair

Mr. Chuck Cadman

Prof. Anne-Marie Boisvert

Mr. Chuck Cadman

Prof. Anne-Marie Boisvert

1030

The Chair

Prof. Poonam Puri

The Chair

Mr. McKay

1035

The Chair

Prof. Poonam Puri

Prof. Anne-Marie Boisvert

1040

The Chair

Mr. John Maloney (Erie—Lincoln, Lib.)

Prof. Anne-Marie Boisvert

Mr. John Maloney

Mr. Louis Erlichman

Mr. John Maloney

Mr. Louis Erlichman

Mr. John Maloney

Prof. Poonam Puri

1045

Mr. John Maloney

Prof. Poonam Puri

Mr. John Maloney

Prof. Poonam Puri

The Chair

Mr. Paul Harold Macklin

Prof. Poonam Puri

1050

Mr. Paul Harold Macklin

Prof. Poonam Puri

Mr. Paul Harold Macklin

Prof. Anne-Marie Boisvert

The Chair

Mr. John McKay

Prof. Anne-Marie Boisvert

1055

The Chair

Prof. Poonam Puri

The Chair

Prof. Anne-Marie Boisvert

The Chair

Ms. Tamra Thomson (Director, Legislation and Law Reform, Canadian Bar Association)

Mr. Greg DelBigio (Member, National Criminal Justice Section, Canadian Bar Association)

1105

1110

The Chair

1115

1120

The Chair

Mr. Chuck Cadman

Mr. Greg DelBigio

Mr. Chuck Cadman

Mr. Greg DelBigio

Mr. Chuck Cadman

Mr. Greg DelBigio

The Chair

Dr. Christopher McCormick

Mr. Chuck Cadman

The Chair

Mr. John McKay

1125

Mr. Greg DelBigio

1130

The Chair

Dr. Christopher McCormick

The Chair

Mr. Paul Harold Macklin

1135

Mr. Greg DelBigio

The Chair

Dr. Christopher McCormick

The Chair

1140

Mr. Greg DelBigio

1145

The Chair

Dr. Christopher McCormick

The Chair

Mr. Cadman

Dr. Christopher McCormick

1150

Mr. Chuck Cadman

Dr. Christopher McCormick

Mr. Chuck Cadman

Dr. Christopher McCormick

The Chair

Mr. Greg DelBigio

The Chair

Mr. John McKay

1155

Mr. Greg DelBigio

Mr. John McKay

Mr. Greg DelBigio

Mr. John McKay

Mr. Greg DelBigio

The Chair

Mr. Paul Harold Macklin

Mr. Greg DelBigio

Mr. Paul Harold Macklin

Mr. Greg DelBigio

Mr. Paul Harold Macklin

Dr. Christopher McCormick

Mr. Paul Harold Macklin

Mr. Greg DelBigio

1200

The Chair

Mr. Greg DelBigio

The Chair

CANADA

Standing Committee on Justice and Human Rights

NUMBER 090

1st SESSION

37th PARLIAMENT

EVIDENCE

Thursday, May 23, 2002

[Recorded by Electronic Apparatus]

¿ (0930)

[English]

The Chair (Mr. Andy Scott (Fredericton, Lib.)): Welcome. Bonjour. I call to order the 90th meeting of the Standing Committee on Justice and Human Rights. Pursuant to the Order of Reference of February 19, 2002, our subject matter is Bill C-284, An Act to amend the Criminal Code (offences by corporations, directors and officers).

To help us in our inquiry into this matter, we have a number of witnesses this morning. From the International Association of Machinists and Aerospace Workers in Canada, we welcome Louis Erlichman, the research director. Appearing as individuals, we have Professor Poonam Puri, from Osgoode Hall; and Madame Anne-Marie Boisvert, of the Faculty of Law at Université de Montréal.

I hope you've all been briefed by officials to the effect that we would generally have you give a presentation of approximately ten minutes. I will give some kind of cryptic signal when you're close, and then we'll allow the opportunity for members to engage witnesses in some questions and answers.

I'm going to proceed as I have it on the agenda, so I turn first to Mr. Erlichman.

Mr. Louis Erlichman (Canadian Research Director, International Association of Machinists and Aerospace Workers in Canada): Thank you, Mr. Chairman.

I would like to thank the committee for giving us the opportunity to appear before you to discuss Bill C-284, which amends the Criminal Code to ensure corporate accountability and provides for criminal penalties for offences by corporations, directors, and officers, particularly in relation to workplace safety.

The International Association of Machinists and Aerospace Workers represents over 50,000 workers across Canada, in the air transport, aerospace, and other industries. The issue of workplace safety is clearly of great concern to our members. IAM members are injured every day in the workplace. A few weeks ago, in St. Thomas, Ontario, one of our members, the father of four young children, was accidentally killed by an industrial press.

While there have been advances in workplace safety In recent years, notably as a result of legal advances like the right to refuse and mandated joint workplace health and safety committees, we are also seeing cutbacks in regulatory resources at all levels of government. We are seeing an increasing reliance on internal corporate responsibility, which is always problematic in the face of competing, short-term, financial interests. In the broader context, the Westray disaster was only the most blatant example of a continuing problem—a lack of corporate accountability, particularly in the area of workplace safety.

Far too many people are being killed and injured in Canadian workplaces, and we are sure you have already heard the statistics on workplace injuries and deaths. We hope members of this committee agree that they are far too high and that we need to do everything in our power to minimize the likelihood that anyone is going to be maimed or killed at work.

Frankly, we come to these hearings with mixed feelings. On one hand, this committee is holding hearings on a private member's bill, and all parties in the House seem to support at least the general principle behind the bill. That could be seen as positive. On the other hand, we wonder about the real commitment of the government to this or similar legislation. This is not the first time that there has been a broad expression of support from all parties for such legislation. Rather than allowing a vote in the House on second reading that would have given approval in principle to this bill, though, the government has simply referred it to this committee for further study.

Justice department staff have come forward with only a vague analysis of possible general legal directions for legislation. Instead of action, we seem to be getting excuses. It has been ten years since the Westray disaster, and over four years since the Westray inquiry made it clear that the current Criminal Code is inadequate to deal with corporate responsibility and blatant crimes against workers. Why does the government lack the political will to move forward?

Bill C-284 would make it clear that corporations and their directors and officers can be held criminally accountable for their actions. It would remove the corporate veil that has allowed corporations and those in positions of authority to evade responsibility. It recognizes that corporate misconduct can be systemic or cultural, and says explicitly that wilful blindness is not an acceptable defence.

We've heard concerns raised that the proposed legislation is unfair to corporate directors, who can't be expected to pay attention to unimportant matters like the health and lives of employees. It has even been suggested that the potential for legal liability might dissuade people from participating on corporate boards. If this were true, we would see it as a good thing. We don't need directors who believe the health and lives of workers are not an important part of corporate governance. There is no social or economic justification for an unsafe workplace.

From the evidence of recent events, it is not clear that corporate boards do a very good job even overseeing the strictly financial aspects of corporate governance. It would be a good thing if every corporate board received not only financial reports, but also regular reports on the state of worker health and safety. Otherwise, workers are not viewed as human beings who have a basic right to safe working conditions, but merely as an expendable resource.

This proposed legislation should only have a limited application. It does not open the door to widespread corporate witch hunts. In fact, it probably will lead to few actual prosecutions. It targets only those responsible for direction and control, and it is hard to see that it requires any more than minimal due diligence—reasonable, prudent, and responsible conduct on the part of managers and directors with respect to worker health and safety. It punishes only active wrongdoing or wilful negligence.

¿ (0935)

The point of this legislation is deterrence, not vengeance. Westray made it clear that there was no real penalty for criminal conduct with respect to worker health even in the most egregious circumstances. Clearly, the best result of this legislation would be that corporate practices would change so that there will never be a prosecution.

Technical legal questions have been raised about the proposed bill. Considerable analysis has been done on these questions, and the steelworkers' union has provided you with amendments that deal with possible legal issues. If the government is serious about its support for the principles of this bill, its legal drafting staff should be working on what they believe to be a workable version. This is very important legislation. It's legislation that will save lives, and we urge this committee to call on the government to move forward quickly with this legislation to provide for true corporate accountability.

I make this presentation on behalf of Dave Ritchie, our Canadian vice-president who unfortunately is unable to be here today. Thank you.

The Chair: Thank you very much.

I now turn to Professor Poonam Puri, of Osgoode Hall.

Professor Poonam Puri (Individual Presentation): Thank you, Mr. Chair, for the invitation to speak before the Standing Committee on Justice and Human Rights on the important issue of corporate criminal responsibility in Canada. In the next ten minutes or so, I'd like to focus on two points. First, I'd like to emphasize that a bill of the nature of Bill C-284 is desirable from a public policy perspective because it labels as criminal that misconduct that we, as a society, find most egregious. Secondly, with respect to penalties imposed upon corporations convicted of criminal offences, my empirical research shows that corporations are given relatively meagre fines that have little to no impact on the way they do business. At the end of my presentation, I'll recommend an alternative to imposing fines.

Before I turn to the two substantive areas, I'd just like to provide the committee with some background about myself so that the committee is aware of my areas of expertise and my limitations.

I'm a law professor at Osgoode Hall Law School. I studied at the University of Toronto and at Harvard Law School. Last year, I was a visiting professor at Cornell Law School. My teaching and research expertise are in the areas of corporate law, corporate governance, corporate criminal responsibility, the legal profession, and the economics of legal fees.

I've recently written an article entitled “Sentencing the Criminal Corporation”. It’s the empirical analysis that I just referred to. It's currently at press, so I wasn't able to provide it to the committee a week before this session so that it could be submitted as a brief. I have brought a copy of it with me, though, and I'm happy to leave it with the committee if it so wishes.

Let me now move on to the substantive portion of my presentation.

First, I'd like to address some of the policy reasons for why I think we need to think seriously about imposing criminal liability on corporations and why we should have specific provisions along the lines of Bill C-284 in the Criminal Code. It's a fact that corporations engage in activities that cause harm to third parties. The harm could be caused advertently or inadvertently. The third party could be an employee, a consumer, a supplier, or the government. We can attempt to control corporate misconduct through a spectrum of policy choices. Private enforcement is one option, through the civil justice system via tort law remedies and contract law remedies. Public enforcement through the criminal justice system and regulatory agencies is another option, as we know.

Private enforcement does provide compensation to the those who are injured, and some level of deterrence, but a problem with it is that it's not always suitable in redressing corporate misconduct. In particular, private enforcement fails when those who are harmed are unable to detect the harm, when the harm to each individual is relatively small, or when the individuals don't have the financial means to bring a private suit.

Private enforcement through the civil justice system is also inadequate. I think this is where public enforcement is more appropriate when society wants to express its collective values—the rules that it wants everyone, including corporations, to abide by.

Public enforcement mechanisms involve governmental detection, prosecution, and punishment of wrongdoers. Corporate misconduct is labelled as either regulatory or criminal. In Canada, most corporate misconduct is labelled as regulatory misconduct as opposed to criminal misconduct. The choice between labelling misconduct as criminal or regulatory is quite controversial. Labelling corporate misconduct as regulatory, saying it’s a regulatory offence, suggests the conduct is basically an undesirable by-product in an otherwise well-functioning market. Labelling something as criminal attaches a greater stigma to it.

In my view, we should label really serious corporate misconduct as criminal. It sends a message to the corporate wrongdoer, to other potential corporate wrongdoers, and to society at large, that the misconduct is most egregious. Therefore, the contents of Bill C-284, which expressly codify corporate criminal liability, are important. They emphasize that serious corporate misconduct will be treated as criminal. The provisions are also broader than the traditional basis of corporate criminal liability in Canada, which has traditionally been the identification doctrine.

¿ (0940)

In my view, the identification doctrine has resulted in too few corporations being charged and convicted of criminal offences. My study that I referred to earlier shows that in 1999-2000 in Ontario, approximately 170,000 adults were charged with Criminal Code offences, but only 125 corporations. As well, the conviction rates were substantially lower for corporations as opposed to adults.

We should remember that the criminal law is a policy tool that we have available to us to regulate undesirable conduct. The criminal law is a social tool. It's a means to an end, not an end in itself, so I don't think we should get hung up over questions about how a corporation can have a guilty mind. I think we need to keep in mind that what we label as criminal activity is a policy choice. Criminal activities are the worst sorts of behaviour that members of societies can engage in. If corporations commit some of the worst sorts of activities, then we should be entitled to label them as criminal. In terms of some of the questions like how a corporation can have a guilty mind, I think reasonably intelligent people such as us should be able to modify criminal law principles that are aimed generally at individuals in order that they fit the corporate context.

Let me now turn briefly to the second issue that I wish to cover, that being the sentencing of corporations convicted of criminal offences.

Bill C-284, and particularly proposed subsection 467.3(3) sets out penalties to be imposed on convicted corporations. It's interesting to note that the penalties are set out as maximums. There’s a maximum of $50,000 for a summary conviction offence, a maximum of $2 million for an indictable offence, and a maximum of $10 million if a corporation is convicted of murder or manslaughter. Under the existing section 735 of the Criminal Code, the maximum penalty for a summary conviction offence is $25,000 and the penalty for an indictable offence is entirely in the judge's discretion. Again, the study that I referred to earlier sets out statistics for the years 1998, 1999, and 2000, and shows that the levels of fines imposed by judges on corporations are relatively meagre. Let me just give you one example.

In 1999-2000, only 58 corporations were fined under the Criminal Code in Ontario. The mean fine was $7,800, and the median fine was $2,800. Again, I don't have the context in terms of what types of corporations these were, but these fines don't necessarily hurt a corporation economically. The maximum fine imposed during this time period was $175,000. And I could convey similar statistics to you from other provinces.

My recommendation is that, in addition to the maximum penalties set out in the code or set out in Bill C-284, guidance be given by way of an express provision in the Criminal Code that the minimum fine that should be imposed on a convicted corporation ought to be the harm caused or profit gained by the misconduct. In my view, this would constitute optimal sentencing policy. When the minimum fine is equal to the harm caused or the profit gained by the corporation, only then will the corporation internalize the cost of the misconduct. Only then will we go any way toward effective deterrence of corporate misconduct.

That's where I'll end. Thank you.

The Chair: Thank you very much.

We'll now go to Madam Anne-Marie Boisvert.

Professor Anne-Marie Boisvert (Individual Presentation): Thank you.

I tried to find where I had seen the sentence that I wanted to quote. I couldn't, but I remember it and I'll just paraphrase that sentence for you because it's a piece to think about: When somebody dies at the hands of another person, we usually call it murder; when this happens in war, we call it a casualty; and when this happens at work, it's an accident. I'll say right now that I'm in favour of the adoption of a bill like the one that is proposed, because this culture has to change.

¿ (0945)

[Translation]

Thank you very much for inviting me here. I sincerely hope that my comments will be helpful. Given the format of the presentation, I will keep to generalities, and principles. Of course, it will be a pleasure to answer your questions.

At the technical level, I have not changed my mind since the discussion paper that I had prepared for the Uniform Law Conference, and this document is still quite up to date at the legal level. Little needs to be added. Law has not much evolved in this field. So I would say that the document that I prepared is the starting point for my presentation.

My presentation will be both realistic and pragmatic. Pragmatically, I will start with three preliminary legal comments on three issues that we tend to forget about when talking about adopting a bill such as the one that was submitted.

First comment: legally, we should not lose sight of the fact that more than one person may commit the same offence, especially when we are talking about the liability of administrators. When an offence is committed, we often try to find the guilty party. The law allows us to find many guilty parties; we should keep this in mind.

Second comment: I think that we should adopt legislation, but even if we don't, our law already recognizes the criminal responsibility of corporations, and this is not necessarily-and I am using the example here, because I know that your committee has discussed it--, because there was no adequate legislation, there were no prosecutions, for example, in the case of Walkerton. Perhaps existing legislation already allowed prosecutions and other reasons than the absence of rules may have led to a lack of prosecutions.

Third general comment: responsibility theory, which establishes the responsibility of corporations, is not the only cause of difficulties in prosecuting corporations. Adopting a theory is not difficult. Complex prosecutions require resources. It takes educated enforcers. Having ten years of experience in patrolling the streets is not necessarily the best training for becoming a corporate cop. So adopting legislation is not difficult. You need political will, trained investigators, and resources for both investigations and prosecutions. I think we should be aware of this.

This being said, I think that legislation needs to be adopted soon, but legislation that to a certain extent would have a symbolic effect. Perhaps it would also have a ripple effect for spreading the word and creating what I would call an event. I told you: I am a pragmatic person.

What are the main ideas? Following the discussion paper that was prepared, and which, in my opinion, was very insightful, well prepared, and provided us with clues that we could read between the lines, I would say that I agree with what the paper contains.

First, I would like to present some general ideas. I think that we should resist establishing a specific offence. I am thinking, namely, of corporate manslaughter, which was mentioned. We risk creating anecdotal legislation that does not cover the entire terrain, and which may lead to confusion. If special offences are planned for corporations, will this mean that it will not be possible to prosecute for other offences? We risk creating confusion and giving the message that it is a serious offence when workers are killed, but that it is not serious when they are injured.

¿ (0950)

I think that what we need are measures, coding a theory for attributing responsibility to corporations, a theory that is general, applicable to all offences. Obviously, certain offences will never be committed by corporations. We will never accuse a corporation of bigamy; this is not a problem. What we need is a general theory that we can apply to all relevant offences, from assault to homicide, of course, but also to dishonest offences. I am referring here to fraud, and all kinds of financial market offences, and all kinds of malfeasance. We should make corporations liable for committing these types of offences.

Therefore, the first message is to resist the temptation of creation piecemeal offences. What is needed is a grid to apply or recognize corporate responsibility for all relevant Criminal Code offences; I would even add, for all federal law.

Second, it will be difficult. Many models have been presented: we know certain things. Identification theory that is applied in Canada is not satisfactory, especially for large corporate entities. It's great for small companies; it is not functional in the case of large corporate entities. We know that the American model has been much criticized. All this is in the discussion paper.

As for me, I would say that Australia has the most interesting model. I know that we don't have statistics on the success rate, but I would say that is not a reason not to try it. We are in a domain where we have to innovate. The Australians have done serious work here. Everyone agrees that it is probably the most interesting model. The Justice Ministry officials are able to come up with something similar. Why not try it, even if it later needs some adjusting? I would say that we have nothing to lose. This model is interesting in that it links both our traditional theory, which functions in certain cases, and it is based also on this notion of deficient corporate culture. I would say that what we often criticize when talking about responsibility theory, about deficient corporate culture, is its complexity and the complexity of trials.

Personally, I would say that some prosecutions that have been started in Montreal against organized crime, prosecuting 17 members of the Hell's Angels group simultaneously, required, for the infiltration of the organization, special investigators, special investigative teams and special prosecution resources. Prosecuting a large corporation following a disaster or a major event will certainly require the same level of resources, no matter which responsibility theory is being used. Difficult practices, therefore, are not inherent to the model; they are inherent to the corporate world and the energy that must be deployed to infiltrate it, to find out how it works.

I would also say that passing legislation would perhaps create an event that in certain cases would put the issue of resources for prosecution on the front burner.

I have a comment regarding penalties. We can have lengthy discussions regarding penalties. I agree with what my colleague told you. I would simply say this: it is clear that first we have to be realistic in setting the goals that can be achieved through criminal sanctions. We cannot, following trial and imposing a penalty, repair everything, compensate everyone, foresee everything. We have to be aware that what is important is the symbolism of finding guilt.

I would suggest that beyond penalties, we should perhaps legislate simply to inform judges that the fine is not the only penalty available. I would bring up the possibility, for example, of issuing probation orders, without going into too much detail.

¿ (0955)

Having much reflected upon this, I find that what has often been overlooked is the fact for some companies what is most important--need only think about publicity--, is their name.

I imagine, for example, if a company is found guilty of having a defective product, and it is obliged to buy full centre page ads in the Globe and Mail to publish its conviction. This would perhaps inflict as much harm as any fine that you could imagine or impose. Quite simply, therefore, I would state that probation orders are possible when a company is found guilty.

I would like to draw your attention to the fact that many measures--I need only think about the Competition Act--already contain certain rectifying measures, etc. It is not often used by the judges, and it is difficult to handle because its economic impacts are difficult to verify for the judges. I would proceed, however, simply, and I would allow probation orders.

I have two final comments. As for the responsibility of directors. I would say quite simply, as we mentioned in the discussion paper, that we must be very careful upon convicting an individual. I think that third party liability, in the absence of personal fault should be banned, and it poses constitutional problems.

I know that you have discussed the last question: who is a corporation? I would simply refer you to the White Paper that the Department of Justice had prepared. We have to give a wide definition to the corporation. We cannot only target corporations that are pure for-profit corporations. I would simple codify common law: it already allows declaring corporations that are not complete corporations guilty, and I think that there is no reason why this position should not apply.

Thank you very much.

The Chair: Thank you very much.

Mr. Cadman, you have seven minutes.

[English]

Mr. Chuck Cadman (Surrey North, Canadian Alliance): Thank you, Mr. Chair. I'd like to thank the witnesses for coming today.

Just as a brief question, how far up the chain do we attach accountability and liability? Some folks have said that the directors should be responsible for virtually everything done by their employees, and then we get varying degrees of that all the way down. I'd just like some opinions. If you're talking about a large corporation that may have directors in Vancouver and something happens at a plant in Toronto, how liable is the director in Vancouver for what happens in Toronto? That's what I'm struggling with.

The Chair: Professor Boisvert.

Prof. Anne-Marie Boisvert: I have a general answer. As far as responsibility and criminal liability for individuals are concerned, the Supreme Court of Canada has said the minimum fault standard is a gross departure from the norm. I would say that for administrators, depending where they are on the scale, there are management standards. The threshold for criminal liability has to be the gross departure from that standard of management. If he didn't depart grossly from the standards of what he had to do, I don't believe a senior director in Vancouver could be held liable for an offence committed by somebody else.

That's the general answer. It cannot be anything else. Otherwise, it's contrary to the Constitution. This is obvious.

The Chair: Mr. Erlichman.

Mr. Louis Erlichman: Obviously this is going to depend on individual circumstances, but for corporate directors, at the very least—there’s an Australian example that provides a legal example of this culture—it should be an issue that they have to be aware of. For worker safety or for environmental issues, there has to be a system out there. If the system is in place, it's reported on, and if somebody misreports or does something like that, it’s one thing. But to simple say, “We weren't aware because it was somewhere else”, that seems to me to be a pretty weak defence if there were serious problems with respect to worker health and safety, environmental issues, or other kinds of things.

I don't think there's a simple answer, but at a certain level, simply saying it was too far away from you so you're not responsible shouldn't be an acceptable defence with regard to the constitutional issues. I'm sure that if such legislation ever happens, this is going to go to the Supreme Court of Canada and the constitutional thing will be worked out. But I don't think you want to say it has to stop at a certain level. Otherwise, why would I be aware? You should at least be aware that the system is out there, even if you're not aware of what every single person is doing at every single moment.

À (1000)

The Chair: Professor Puri.

Prof. Poonam Puri: In my view, imposing criminal liability on directors and senior officers won't require a standard of perfection for them. They won't be required to know exactly what's going on in every single factory, manufacturing plant, or office. What they will be required to do is put their minds to broad policy issues, whether they do that once a year, once every six months, or once every three months. They will be required to make sure that appropriate procedures and policies are in place to make sure, in a reasonable way, that accidents, health and safety violations, and other violations won't occur.

I don't think perfection is required. I don't think we would require too high a standard. By imposing criminal liability or the possibility of criminal liability on them, we're not asking directors and officers to get involved in the minutiae of day-to-day operations. They are responsible, in a general way, for making sure that reasonable policies and procedures have been implemented in the various aspects of the corporate organization.

Mr. Chuck Cadman: Along the same line, I raised a question some time ago about how this would apply to a municipality. It could be said that the mayor is the CEO and the city council is the board of directors. How does this criminal liability apply to elected officials at the municipal level?

Prof. Anne-Marie Boisvert: It could. To give an example, with any of these standards, I cannot figure that a municipality could be held liable because some toy in a park for the kids is finally found to be defective and there is an accident. There is obviously no liability for such a thing. But when there are rumours of mismanagement or of danger, and when the reflex of the municipality is to ignore what happens, you're getting close to engaging responsibility. Mainly, that's the standard, and it could happen.

The Chair: Anyone else? No?

[Translation]

Welcome, Mr. Laframboise. You have seven minutes.

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): I will continue along the lines that my colleague mentioned regarding municipalities. I think that you are quite right: if we create a law, we do so for all the directors and for all those who have authority, so of course, this includes municipalities. It could even be unions that have developed a safety policy that goes completely against the industry, or whatever. All persons, therefore, who are in a position of directing a company should be responsible. I think that this is recommendation that you have been making, Mr. Boisvert.

Yet we have to understand that the more we try--and I am listening to Mr. Erlichman--to constrain all the directors...Obviously, in the large corporations, there are many politicians who are named to boards of directors and who are often not company managers, but simply engage in public relations. Therefore, you understand why your bill has never become legislation: you don't have to ask why, with everything that is going on in the Liberal Party.

There is no middle ground. Once we amend the Criminal Code, the courts will decide. As for the terms, we cannot make any exceptions or exclusions. I agree with you that we need an Act, and those who are in a position of administering companies and controlling employees must be liable, must have a safety policy that respects what we are going through in this century. I believe that you mentioned it quite well.

I would ask all three of you if you have any comments, but there is no middle ground here: we pass legislation, and those who have the authority for establishing standards and who hold positions will be liable. They must establish the standards, and if they don't, they will be held liable. This seems to be your message.

Me Anne-Marie Boisvert: I would like to repeat what I said at the start. It is already possible in Canada to prosecute municipalities, and this has been done. It is possible to prosecute governments. If I had had the time, I would talked about the Quebec environmental case, R vs. R. It is already possible to prosecute directors. You have certainly heard about the Canadian Dredge and Dock case, which established the criminal responsibility of corporations in Canada: and the companies, Marine Industries and the others, and their Presidents, and the principal directors were found guilty.

Upon adopting legislation, we are not talking about revolution; it is quite simply a question of signalling that this law already exists, and perhaps modifying, clarifying and better organizing the standards under which guilt may be found.

I read some of the transcripts of your works, and what hit me was that the fears that are being raised should have come up thirty years ago, because these prosecutions have been possible for the past thirty years. The merit I see in this bill, beyond clarifying concepts, is to send a message, and perhaps--and I spoke earlier about this--create movement. As for prosecutions, not only is the Act important: it would not exist if there weren't specialized prosecution and investigative teams, or the required resources.

À (1005)

Mr. Mario Laframboise: This brings me to my second question. I agree with you that this will require resources. In matters of investigation, however, you know that the provinces bear most, if not all, costs. In Quebec, anyway, it is the Sûreté du Québec. We have to think of perhaps asking the federal government to invest as well, using its tremendous surpluses, in a provincial assistance program, or in all those who are responsible for conducting investigations so that they have the required funds for training personnel. I agree with you, Ms. Boisvert: if we don't have the requisite personnel, competent in reviewing increasingly complex corporate structures...Today, there are even companies that have to publish their org charts so that investors are aware of what they are investing in. Obviously, I agree with you, and it would perhaps be time to ask the federal government, while applying this policy, to provide the requisite funding to investigators.

Do you agree with me, Ms. Boisvert?

Prof. Anne-Marie Boisvert: I don't know who should provide funding, and I will not enter into that debate, but I would simply state that a movement was started, at a given time, regarding prosecutions of organized crime. In Quebec, this is giving results. I should mention that our friend Mom Boucher was convicted under the good old Criminal Code, and not under organized crime statutes. What the passing of this legislation, which I personally resisted, has led to is surely the creation of this movement that has led to appropriate funding for investigations and prosecutions. For future prosecutions, the legislation will facilitate certain work, but it is the ensemble that must be created: I agree with you.

Mr. Mario Laframboise: I would like to make one last comment.

The Chair: One moment, please. Would you have any answers, Ms. Puri or Mr. Erlichman?

Mr. Erlichman.

[English]

Mr. Louis Erlichman: In terms of resources, it has already been said that the legislation obviously isn't terribly useful without the resources. You're suggesting that the federal government provide resources to the provinces. Whether or not this is the forum in which to raise that issue, clearly resources are an important issue for training people, for training within the police forces, and for everything else that would be required. Frankly, just taking this step of adding to the Criminal Code an explicit piece on these kinds of offences, having this clarification, is an important step. Obviously, one of the next steps is going after resources provincially. I personally have a feeling that we're some distance from getting this legislation passed, though, so it seems to me to be premature to be worried about coming up with the resources.

[Translation]

The Chair: Mr. McKay, you have seven minutes, please.

Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): Thank you, Mr. Chair, and I would like to thank all the witnesses.

[English]

I very much appreciate your testimony here.

Just following up on my colleague's line of questioning and the last comment by Mr. Erlichman, it seems that this is very much a question of deterrence and a question of changing a mindset, an attitude, about being reckless, about acts of omission as much as acts of commission.

Language has become increasingly important in criminal law. We've seen statutory changes to language, such as the use of “home invasion” now being inserted in the code, as opposed to “break and enter”. There's a movement among groups like Mothers Against Drunk Driving to call it “vehicular homicide”, because that encapsulates what is really happening. To that extent, I would ask you about inserting into the code language like “corporate manslaughter” and “corporate criminal negligence”. To me, putting those words in place seems to be at least a step in the right direction.

We can talk about prevention, the need to change provincial regulations, and the need to educate. But all of those things should be taking place in addition to anything we do here. We have to work with the restrictions that we have in terms of changing federal legislation, which is what Mr. Justice Peter Richard requested in the Westray inquiry.

To that extent, do you think this would raise the bar? Would it increase this threshold of a minimum standard that you spoke of, Professor Boisvert? Would it at least put in place specific charges, in addition to sending a message and perhaps at least focusing the attention of corporations on the consequences? Nothing seems to focus attention more than the threat of consequences does, and the current government could be mindful of that.

To me, this idea of having that type of language seems at least to have that public message of deterrence, but it also might assist—might—prosecutors before those who are trying the facts, in terms of allowing those prosecutors to say that the Parliament of Canada has recognized this as a criminal offence if the evidence is there, if the standard of proof beyond a reasonable doubt is met. Is that something you agree with? At least this would be a step, albeit a minute one, in the right direction.

À (1010)

Prof. Anne-Marie Boisvert: I agree with you that symbols are important, but I said I would resist the temptation to create specific offences for corporations, because what is proposed in something like that would only be a duplication of existing offences.

There is a danger of forgetting important offences and of sending mixed messages. If we want to use the words “corporation” and “crime” together, I would do it maybe in the sentencing section. I would say that when a corporation commits a crime, when a corporation commits corporate manslaughter, it is liable too. So I would maybe do it in the sentencing, but I would resist creating special offences because there might then be a side effect in the sense that if something is not named, like corporate dishonesty, then it's not important.

Mr. Peter MacKay: I take that point very much to heart.

I believe it was Mr. Lee who raised this issue yesterday: The fact is that criminal charges were laid in Westray. Granted, they didn't capture everyone, if you will—the owner-operator in this instance—but criminal charges were laid. The process had begun. What took place in terms of the tragedy on top of that tragedy was that the case never finished its due course, but that's another issue.

Do you agree that being charged, in and of itself, is part of the deterrent, part of the public message of denouncing corporate irresponsibility or acts of omission that put people's lives at risk? Judges very often make that comment at the end of a trial: that the public spectacle, the outing of an individual before the courts for breaking the law, has some deterrent effect in and of itself. If we're talking about expanding the envelope, then I agree with you. Perhaps there is more wisdom in trying to work with the existing section of the Criminal Code than there is in creating a new one that might be seen as duplication.

Prof. Anne-Marie Boisvert: There is room for that. If we create a new section in the Criminal Code dealing with the attribution of liability to corporations, I think we have a duty to try to make it workable. It would then send a message. Of course, when a company like Westray is sent to trial, it sends a message. But when ten corporations are acquitted or when the charges go nowhere, there is another message being sent. So we have to be careful.

À (1015)

Mr. Peter MacKay: I have a very short question on the charter.

The Chair: Peter, Professor Puri wants to weigh in here.

Prof. Poonam Puri: I think codifying corporate criminal liability in the Criminal Code, as Bill C-284 does, is a good thing. It sends an important signal. But I'm also concerned that if we have specific criminal offences for corporations, we're going to focus only on those and forget about the others, as Professor Boisvert has indicated. But I think we can do it. Bill C-284 does focus on manslaughter at the sentencing stage. If it's an offence dealing with manslaughter or murder, the penalty is greater, showing that this is regarded as more serious. Also, there is a particular focus on health and safety violations.

So something certainly could be done, but we shouldn't just focus exclusively on a few specific charges or offences for corporations in the criminal context. The worry is that we'll forget about everything else that corporations do.

The Chair: Thank you very much. We'll be back to you, Mr. MacKay.

Mr. Macklin, you have seven minutes.

Mr. Paul Harold Macklin (Northumberland, Lib.): Just for a moment, I want to go back to one issue that was raised. That was the idea that, first of all, it is difficult to obtain convictions in this type of matter, and that the standard is in fact a gross departure from the standard of management. I don't want to make a big deal out of this, but I have always understood that to create a criminal charge, you really had to show a marked departure. To me, there seems to be a significant difference between a marked departure and a gross departure. Is there a significance that we should be dealing with within this particular area?

Prof. Anne-Marie Boisvert: No, for me, they're both the same thing. I'm sorry, but I'm translating my thoughts from French, in which they're both the same. Let's say, “marked departure”.

Mr. Paul Harold Macklin: Very good.

Going back to follow up on Peter MacKay's position, what we're obviously trying to create is a safe workplace. The regulatory regime that was in place at Westray obviously failed, and it failed miserably. As we proceed through these hearings, I'm still concerned about whether it is a law that we need, or whether it's really enforcement that we need. Is there in fact a hole?

Professor Boisvert, I'm hearing you suggest that we may not want to create a new law. I would therefore like to get some clarification on how you believe we could become more effective with what we have in terms of its deterrent effect. What we're really trying to do is create a deterrent of some significance that will lead to a safe workplace. We don't really want to be out there. It's the last resort, and it's obviously after the fact to go out there, find someone, and put people in jail, or whatever it might take as a result of this. The key issue is to create a safe workplace, and I think all of us agree on that. Can you comment on that, please?

Prof. Anne-Marie Boisvert: Yes, and I thank you for giving me the opportunity to clarify my meaning, because what I've said might sound contradictory.

First of all, what I said is that it is already possible to prosecute corporate misconduct. That was my point. I stressed that point in order to make sure it is understood that the concerns that people now raise should have been raised before. That being said, the theory that the courts have developed has proven not to be effective enough in some areas, especially for big corporations. This theory simply necessitates that we find one individual who is in charge somewhere in the corporation, who is high in the hierarchy, and who committed the offence himself or herself. This makes it easy to find guilty—if I can make use of a blunt example—a one-man corporation, but it makes it difficult when it's a McDonald's that you're prosecuting.

I think the virtue of a new law would be to design a theory that is more workable and more in tune with the times and with the types of corporations that we have. It would send a symbolic message that Parliament is addressing this issue, and would maybe start a movement.

À (1020)

Mr. Paul Harold Macklin: Is it the opportunity of types of sentences that we really need to be concentrating on then. In other words, is it the variety of sentences that could be there? Are you saying the sentencing power of the judges is too limited in this area at the moment?

Prof. Anne-Marie Boisvert: I have been advocating to judges that they could already use probation orders, but they're not sure. I would therefore send a signal that they can. That would help.

Mr. Paul Harold Macklin: Professor Puri, do you have any comments?

Prof. Poonam Puri: I think your question was two-pronged. The law needs to be changed, and we also need to think about application of the law and enforcement of the law.

In terms of the law, I agree with my colleague that, in the current law as it stands, there is the possibility of a corporation being charged and convicted. The doctrine as it stands, however, is too narrow, especially with large corporations. It doesn't allow for convictions in many cases because of the way in which that doctrine has developed. It's quite narrow. Bill C-284 expands the basis of liability, and I think that's a good thing.

In terms of enforcement, again, in the current section 735, judges do have the opportunity to impose high penalties and to impose more creative sentences, but the reality is that they haven't. We need to send signals to indicate that the possibility is there, but that this just hasn't been done. Briefly, the statistics that I highlighted show that the fines that are imposed currently are relatively low.

Mr. Paul Harold Macklin: How do you suggest we send these signals? Do we do it by legislative change?

Prof. Poonam Puri: I think guidance can be put into the Criminal Code, and not only in terms of what the maximum penalties are. When sentencing decisions are made, maximum penalties are there, but fines are often nowhere close to the maximum. Minimum mandatory sentences are an option.

Mr. Paul Harold Macklin: But isn't that out of vogue right now? Didn't the Canadian Sentencing Commission state that we shouldn't be dealing with minimum mandatory sentences?

Prof. Poonam Puri: It's out of vogue in the context of dealing with individuals, particularly because when you're dealing with individuals, you have a whole variety of factors. In the context of corporations, which are generally engaging in this misconduct for economic reasons, I think minimum mandatory fines are appropriate. If you set the minimum fine at a level at which it is equal to the harm that has been caused or the profit that has been gained by the corporation, that's pretty reasonable.

So when we're thinking about minimum mandatory sentences, I think we need to divide our analysis between the individual context and the corporate context. In the corporate context, it's reasonable to set a minimum fine at a level equal to the harm caused by the corporation or to the profit gained as a result of engaging in the activity.

Mr. Paul Harold Macklin: So you're picking up the American model of culpability somewhat then, and on the ratio that would be applicable in terms of the amount of culpability, so to speak.

Prof. Poonam Puri: That's right. They have a more complicated formula than that, but that would certainly be a step in the right direction.

The Chair: Mr. Erlichman.

Mr. Louis Erlichman: I just want to respond to the question asking what the difference is since it's already there in the legislation, and the idea that maybe we just need more innovative sentencing, and so on.

It seems to me that what you're talking about is quite correct. What we're trying to do is change behaviour in order to make workplaces safer and corporate conduct better. In corporations typically, what typically happens isn't that somebody at whatever level sits down and says the chances of a fatal accident will go up by 1 in 273 if they cut a certain corner, that there will be a cost of such and such, and they will…. That's not what happens. Instead, if you're in the airline business and you have a problem with an engine but want to get that $100-million aircraft off the ground, you say you have to make it happen, you have to get it going. You don't sit down and figure out the odds that it's going to fall out of the sky, you just make sure it gets going. How you respond to that…. In a very narrow, deterministic, economist’s sort of way, somebody sits down and does all these calculations implicitly, but people don't actually do these calculations.

You're going to affect corporate behaviour with a blunt instrument. Frankly, that's what we're talking about with criminal liability. It's to put it in the minds of the corporate directors—all the way up the line, frankly—that there is a penalty, that it is a serious penalty, and that doing these kinds of things is not a minor cost of doing business. It may then feed out through the organization that you might go to jail for this.

People still drink and drive. People break the law all the time and do all kinds of criminal things while being aware of the penalties. But if you don't have the penalty there at all, it's not going to affect people's behaviour.

Saying explicitly in the Criminal Code that corporate misconduct may send you to jail is likely to have that impact on behaviour, and that's what you're after. It's not going to be a matter of somebody doing the arithmetic.

À (1025)

The Chair: Thank you very much.

I'm going to go to Mr. Cadman next. Before I do, though, I want to remind members, witnesses, and any witnesses who may already be here for eleven o'clock that the subject of our review is in fact the contents of Bill C-284. When we're dealing with a bill, we're normally more limited than we are when we're dealing with the subject matter. There have been references to the scope of our inquiry, and I just wanted to make sure, on the record, that people understand that the references to Bill C-284 are helpful, because they give us a framework around which we can apply our thinking. But we're not limited to that, so I want to make sure everybody's aware of that fact.

Mr. Cadman, you have three minutes.

Mr. Chuck Cadman: I'd just like to go along on this business of the corporate versus the individual. I was interested, Professor Boisvert, in your comment or your suggestion that a corporation be required to take out an advertisement in, say, the Globe and Mail. If I understand you correctly, you're basically saying the advertisement would say they have been convicted of something and have to pay for it.

When we're dealing with other aspects of the criminal law…. We just went through a long ordeal with young offenders, with youth justice, and we've been dealing with sex offenders. Some people would like to see publication of young offenders names and some people would like to see public notification when sex offenders are released on parole, but there's a huge resistance on the part of government to doing those sorts of things. Yet you're suggesting that, at the corporate level, we require them to actually pay for advertisements themselves, advertising the fact that they were convicted of something. How do you reconcile that with the resistance to these other things?

I would suggest that it's a public shaming that we're talking about, but I'm not saying it's a good thing or a bad thing. How does that apply? If we're dealing with General Motors, McDonald's, Weyerhaeuser, or something like that, it's one thing, but what about, say, Sam's Lawn Cutting Service, where he's the sole owner and has a couple of employees?

Prof. Anne-Marie Boisvert: For them, that might be useless.

Mr. Chuck Cadman: That's what I'm saying, so how do we reconcile that? I'm not suggesting it's a bad idea, I'm just wondering how....

Prof. Anne-Marie Boisvert: Very quickly, as far as sentencing and fault levels are concerned, or in terms of evidence, burdens, or whatever, the Supreme Court has been very clear. When a disposition or a piece of legislation is specially designed for corporations, different constitutional standards might apply. My message would be that we have to cease trying to treat corporations like we treat individuals. They're in two different worlds. Just because something is good for an individual, that doesn't mean we have to translate it into the corporate world. Just because we could be imaginative regarding corporations—in the sentencing area, for example—that doesn't mean it's a good idea for individuals. We have to stop trying to do all these transfers.

À (1030)

The Chair: Professor Puri.

Prof. Poonam Puri: In terms of public shame or stigmatizing the corporation through an advertisement or some sort of notice in a publication, I think we can separate the analysis of corporations in this situation from that of individuals in the case of sex offenders or other individuals convicted of criminal offences. We have section 7 of the charter to worry about for individuals—a sort of “life, liberty, and security of the person” section—but we don't have to worry about that in the corporate context. Certainly, the Supreme Court has said this. Corporations don't have the same charter rights as individuals.

Again, we don't need to have a blanket sentencing provision that says all corporations convicted of criminal offences must place a notice in a newspaper. It could be up to the judge. It could be a possibility, an option, if it is a case in which it seems to be appropriate to notify the public. It might not be in the lawn-mowing corporate case, but it might be appropriate with a larger corporation when the harm has been to consumers or to a larger community. So it could be an option in the legislation.

The Chair: Thank you very much, Mr. Cadman. I was very generous with your three minutes.

Mr. McKay.

Mr. John McKay (Scarborough East, Lib.): I hope you give me an extra thirty seconds, Mr. Chair.

I have two questions. The first question has to do with director chill, and the second question has to do with broadening our perspective, if you will, or narrowing and broadening simultaneously.

People become directors for a lot of reasons. Some of the reasons are very good reasons and some of the reasons are not particularly good reasons. You've frequently used the phrase “sending a message”. I would suggest to you that by engaging in legislation, we are sending a message. The message may not be heard in the same way by all people at all times, particularly by directors who may well have to reconsider their positions as directors.

Heretofore, there has been an acknowledged body of directors' liability, some of which you can buy insurance for, some for which you can take certain due diligence to make sure you're not exposed to directors' liabilities. But you are now proposing—or the subject matter is, if you will—to expose directors to an area of liability for which they cannot purchase insurance and for which defences of due diligence may or may not be available.

In the real world, when crown attorneys charge people, they usually cast a fairly wide net. I'm therefore asking you to reflect upon this issue. In sending a message by expanding sentencing principles, by amending the code, or creating a corporate culture section, will an enthusiastic approach not in fact create an environment in which well-advised, capable people whom we would like to have as directors, will no longer wish to be directors or will not let their name stand? That's the first question.

The second question has to do with broadening our perspective. We have focussed on workplace safety—and this is particularly directed to Professor Puri, because I know her area is corporate and commercial law. I'm wondering if our focus is, in some respects, too narrow. I'll use the example of gross environmental degradation leading to the immediate, if not longer-term deaths of people who may actually work at a plant or who may be in proximity to a plant.

I have two examples from my own riding in Toronto, one of which was Johns Manville Canada. They created asbestos products, and asbestos products got into peoples lungs. Some evidence indicated that the company doctor actually knew the asbestos floating around in the air was causing the premature deaths of workers. And the second one is an example of a fire in my riding, at a chemical company that essentially ignored all of the health and safety regulations available to us. The result was a fire, and only by the grace of God was the wind blowing out over the lake. Otherwise, we would have had a catastrophe in my own riding, because the fumes given off by the fire were quite toxic and a residential community is within close proximity to the site of the fire.

I'd be interested in your reflections on both of those questions, if I may, please.

À (1035)

The Chair: We'll start with Professor Puri.

Prof. Poonam Puri: On the first issue of director chill, the duty of directors and senior officers is to oversee the business and affairs of a corporation. Directors who are intelligent, who have good judgment, and who are willing to take responsibility for overseeing the business and affairs of the corporation, won't be terribly concerned by this legislation. If they're doing what they're supposed to do anyway—or what they will do when they see legislation such as Bill C-284—they'll put into place procedures and policies that make sure things are running as they should in the corporation in terms of the various activities that they're responsible for overseeing.

Again, we don't expect perfection from them. We expect them to do a reasonable job of making sure someone is thinking about these policies and procedures in terms of health and safety, in terms of environmental issues, and so forth. So I'm actually not all that concerned that there are going to be mass resignations from corporate boards in Canada. If there are resignations, then those will be from the directors we don't want on corporate boards. Those are the directors who were there for the wrong reasons.

In terms of the second issue of broadening our perspective, when you do focus on particular areas, I think you then simultaneously think about other areas, such as environmental issues, which haven't been focused on in Bill C-284, for example. I don't necessarily have a problem with attention being paid to or more priority being given to workplace safety. In terms of environmental issues or in terms of the fire at the chemical company that you referred to, for a corporation and, under Bill C-284, directors and officers, there's still the possibility of liability. A particular focus has been placed on particular health and safety violations, but the possibility is still there for corporate criminal liability in other regards.

Prof. Anne-Marie Boisvert: If I may answer this very quickly, I agree with you. I said we should resist creating specific offences because we have one incident in mind. That's what I call anecdotal legislation, but we need something that is general and which could cover….

We have a tendency and the newspapers have a tendency to focus on specific disasters. But let's think for a minute about the trucking industry, which creates many hazards on the roads because of unrealistic expectations about quotas or whatever. Those things have to be covered by the legislation as well.

And as far as the administrators go, since they are individuals, of course they would have to have some kind of level of personal fault. Of course, a defence of due diligence has to be constitutional, has to be present. I would therefore just ask you to reflect on how directors of big corporations have reacted to the fact that they are financially liable when they grossly mismanage their business. They are personally liable—at least, they are in Quebec—but I don't think that has deterred many people from engaging in directorships.

À (1040)

The Chair: Mr. Maloney.

Mr. John Maloney (Erie—Lincoln, Lib.): In your presentations, you all seem to come on very strongly on the issue of personal director criminal liability. However, in your response to Mr. Cadman's inquiries, you seemed to soften a little bit. In fact, in Mr. Erlichman's brief, it says:

It targets only those responsible for “direction and control”. It is hard to see that it requires any more than minimal due diligence--“reasonable, prudent and responsible conduct” on the part of managers and directors....

So I'm just having some difficulty reconciling my interpretation of your original presentations with the responses given subsequently. You seem to suggest that it's only a very remote possibility that a director in Toronto, Halifax, or Montreal is really going to be brought under personal criminal liability.

Prof. Anne-Marie Boisvert: With the threshold of liability for directors, we have usually seen that they have this feeling there is something to look at but they prefer to ignore it. It's usually wilful blindness that is the.... The only thing I said is that there is a tendency to want to use the directors as a tool in order to make sure and to have the spectre of criminal liability. What I said was never to forget that they are individuals themselves, that they are not corporations, and that there are constitutional standards. Liability for somebody else is not even something we have to envision if they committed no fault. That's what I mean. Once this is said, there are things we cannot do. Vicarious liability is not possible in Canada. It is in the United States, but it is not in Canada. There's no reason to forget that, but there is no reason not to send a message as well.

Mr. John Maloney: Would you agree with that, Mr. Erlichman?

Mr. Louis Erlichman: Yes. I guess it's almost a matter of feel. I've been looking at who has appeared in front of this committee so far in the discussion on this legislation. As far as I can tell, I haven't seen any corporate representatives. Either they are not concerned and think it's a really terrific piece of legislation, or they don't think there's a hope in hell that it's going anywhere. Unfortunately, I suspect the second is the more likely thing they're feeling.

Mr. John Maloney: They may be surprised.

Mr. Louis Erlichman: I hope so. There may be some corporate directors who get cold feet, but some get cold feet about just about anything. It is really impossible to see…frankly, if you're criminally liable now, theoretically you could be gung-ho, and this makes it a little more explicit.

Mr. John Maloney: Professor Puri, if I may quote you, you feel the minimum fine would be equal to the harm caused or the profit gained by the incident. How do I quantify that? Could you give me some way of putting a figure to that?

Prof. Poonam Puri: Sure. I'm going to refer to my paper, which contains an example.

Let's say a corporation dumps chemicals into a lake, in violation of an environmental protection statute. Suppose it costs $10,000 to dispose of the chemicals in accordance with the legislation—in other words, to dispose of them safely and properly. If it dumps the chemicals into a lake, it gains $10,000 because it doesn't have to spend $10,000 to dispose of them properly.

If, upon conviction, we required company A to pay a minimum fine of $10,000, then in terms of thinking about whether to dump or not to dump, it's basically ambivalent, so hopefully the company won't dump. If we make a fine upon conviction of $11,000 when it costs $10,000 to dispose of the waste safely and in the manner suggested by the legislation, then we're hoping the corporation will be deterred from engaging in the corporate misconduct and therefore won't engage in it.

À (1045)

Mr. John Maloney: I follow that logic, but how do we apply that to a loss of life, to someone who is killed?

Prof. Poonam Puri: Judges quantify all the time. In personal injury lawsuits, they quantify loss of life, loss of body parts, and so forth. I don't have exact details for you, but it's done all the time in other areas. I have confidence that if our judges can do it in relation to other areas of the law, it can be done in relation to figuring out what the harm caused is or what the profit gained is in this context.

Mr. John Maloney: So you're applying civil law, tort law, and damage awards to criminal law fines?

Prof. Poonam Puri: In terms of figuring out an optimum policy to try to get corporations to think about these things beforehand, yes, I don't have a problem with that. First of all, there's difficulty with quantifying loss of human life, but in terms of trying to have a deterrent impact, I don't necessarily see a problem with trying to create a rough calculation to do that.

The Chair: Thank you very much, Mr. Maloney.

Mr. Macklin.

Mr. Paul Harold Macklin: As we work our way through this, at least in terms of the bigger corporate structure—in other words, the larger corporations—I'm wondering whether or not we're going to generate an industry that will provide more food for lawyers to go in and effectively balkanize and protect the directors. They'll tell them what pieces of paper they need to send out and what directives they need to suggest to the executive in order to carry out the necessary protections in the workplace, but these corporations may not necessarily really have an effective, safe workplace as a result of it. I guess I'm still struggling with the concept of when the corporate structure becomes guilty and when the people within it are guilty. I think we somehow are getting this a bit confused at times in our discussions, in terms of when an individual is concerned about whether they might go to jail, versus whether a corporation may have their name besmirched by having to place an ad in the Globe and Mail.

Can you somehow give me some degree of comfort in the way in which you're suggesting that we approach this? Can you tell me that we will not in fact simply end up with cushions being placed around those directors to really, in effect, protect them when they've made appropriate suggestions of what ought to happen but don't have an obligation to follow through?

Historically, directors tend to set policy but the executive carries it out. From my point of view, the question then is where the obligation falls, and should this be a change on the corporate side? Or is it necessary that there be a change in the corporate side, in corporate law, in the Canada Business Corporations Act? Should we place a stronger obligation upon directors to pursue the directives that they've made, and get reports back? Or do you feel that's already in existence?

Prof. Poonam Puri: You're right to be concerned that this legislation could be put out there and directors could try to just find ways of making sure they look like they're doing their job when, in fact, they aren't doing much better than they were. But I can think about areas of corporate law in which this is also a concern. For example, the requirement that we impose on directors could be more than just setting up procedures to make sure there are reasonable practices in place. It's reasonable to expect that they set up procedures and practices and that there be a periodic reporting back in order to make sure that those procedures and practices are being implemented according to the plan of the board of directors. I don't think that's too much involvement on the part of the board of directors in terms of day-to-day operations; it's making sure that procedures have been set up and that there's some reporting on a periodic basis. That would certainly do more than just protect the directors in terms of allowing them to say they've done their job. They would actually be required to make sure, in an ongoing manner, that what they've set up in terms of procedures and policies is actually being implemented in the corporate organization.

À (1050)

Mr. Paul Harold Macklin: Would that require a change in the Canada Business Corporations Act, for example? Is that another piece of legislation we should be putting together with this in our attempt to create that safe workplace?

Prof. Poonam Puri: I actually don't think it's necessary. I think the setting up of the procedures and the reporting back would be caught under the provisions set out in Bill C-284, in terms of whether or not the directors have taken reasonable steps. Taking reasonable steps doesn't necessarily just include setting up procedures. You can be more specific in the legislation, but taking reasonable steps doesn't just mean you set up the procedures and never think about them again. I think it's reasonable to require directors to also review those procedures from time to time to make sure they're working. I don't think we necessarily need to turn to the CBCA.

Mr. Paul Harold Macklin: When you talk about wilful blindness, one of the questions is when it become wilful blindness. In other words, where is that demarcation in this discussion?

Prof. Anne-Marie Boisvert: In criminal law, we always work with these kinds of standards. I think we should resist the temptation to try to figure out, like something in a phone book, all the possibilities of wilful blindness. We have to accept that these standards are vague in a way.

I would like to answer more generally to your question. What we're talking about today is using the criminal law to change a culture, and it’s a culture that I would say is a societal culture. I cannot look at a bridge without asking myself how many lives were lost building that bridge, because each bridge means lives. Right now, I think our society accepts it as a reality that workers had to die when Olympic Stadium was built in Montreal, when a bridge is built, or when an arena for hockey teams is built. Right now we're behaving as though this is normal and unavoidable.

Is the criminal law or the use of criminal law going to be enough or magical in terms of the changes it will bring? I told you at the beginning that I'm a pragmatist, but I don't think it could hurt to try to use it.

The Chair: I want to go to Mr. McKay for the final question.

Mr. John McKay: We have essentially three ways to go here. We could go to the, if you will, Australian corporate cultural model, reinvent the wheel, and look at creating a liability where, heretofore in Canada, it hasn't existed. Our second choice is to craft something to go into the Criminal Code, and that something is a specific corporate manslaughter offence. And the third has to do with sentencing guidelines, if you will.

I'm not clear on where the problem is in the latter. I think both of you were concerned that there is ability within the judiciary to effect creative sentences. At this point, I think I understand your testimony to be that this is not happening. Are you therefore recommending specific changes to sentencing guidelines and sentencing principles? Or are you suggesting that our report make reference to the fact that the judiciary is not using all of the tools available to it in areas of corporate liability offences?

Prof. Anne-Marie Boisvert: I think Professor Puri has more to say than I do, but I would quite simply say that, in your report, you should go with just broadening the tools and sending messages to the judiciary. Right now, even when there are stolen goods, they don't do much in terms of compensation for the victims, so I don't have too much faith that they're going to act like civil courts in order to balance damages and levy fines. I think that all Parliament can do at the beginning is send a signal that fines are not the only tools that can be used.

Personally, as far as corporations go, I believe more in the publicity of the trial and the effect of a guilty verdict that I do in the fines. When we're in the criminal realm and not in the regulatory realm, fines might look like an incentive not to be declared guilty of having not respected a regulation. That's one thing. But the fine might be less important when you have to decide if you want to run the risk of being branded a criminal.

À (1055)

The Chair: Professor Puri.

Prof. Poonam Puri: In terms of sentencing, yes, I did state that I don't think the judiciary has been very creative in terms of sentencing convicted corporations and in terms of the fines that they've imposed. They've been relatively meagre or low. When legislation is drafted, I think it would be useful to specifically set out a list of options so that judges are reminded that not only are fines available, but so are probation orders, public notices, or whatever, in the basket of possible sentencing options. So that's one thing.

Secondly, in terms of fines, given that they have been historically so low, I would suggest either minimums rather than maximums, as suggested in Bill C-284, or minimums and maximums—so minimums only, and/or ranges perhaps. This would be similar to what's happening in the United States, and it would give more direct guidance to judges when they are considering the sentencing of convicted corporations.

The Chair: Thank you, Mr. MacKay, and thank you witnesses. I appreciate it very much.

Professor Boisvert, it's murder, casualty, and accident, I believe.

Prof. Anne-Marie Boisvert: Think about it.

The Chair: Thank you for your helpful presentations.

I'm going to suspend long enough for our present witnesses to take their leave and for our next panel to find their way to the table.

À (1058)

Á (1102)

The Chair: I call back to order the 90th meeting of the Standing Committee on Justice and Human Rights. We're dealing with the subject matter of Bill C-284. To help us do that, we have our second panel of the morning: the Canadian Bar Association, as represented by Greg DelBigio and Tamra Thomson; and Dr. Christopher McCormick, a professor from St. Thomas University who I'm sure is going to go back to Fredericton and tell everybody I was wearing green.

On that happy note, we'll go to the Canadian Bar Association.

Ms. Tamra Thomson (Director, Legislation and Law Reform, Canadian Bar Association): Thank you, Mr. Chair. The Canadian Bar Association is very pleased to appear before this committee today as you study issues of corporate criminal liability. We have given you a written statement. The bad news is that we did just walk in with it today, so you unfortunately have not had an opportunity to look at it in advance. The good news is that it is relatively short.

In our statement, we have addressed the issues of corporate criminal liability briefly, from the perspective of both our criminal justice section and our business law section. Those two groups have brought their distinct points of view to these issues.

The Canadian Bar Association is a non-profit, voluntary organization of 37,000 jurists from across Canada. Amongst our objectives are improvement of the law and improvement of the administration of justice. It is in this optic that we make our comments to you today, and we are viewing this committee's review as an important step in policy development in this area of law.

Mr. DelBigio is a member of the criminal justice section, and he will be making further comments relating to our statement today.

Mr. Greg DelBigio (Member, National Criminal Justice Section, Canadian Bar Association): Thank you. I'm pleased to be here. I've had the pleasure of hearing some of the witnesses from this morning, and of reading some of the previous transcripts. I hope we can assist in this important and difficult task.

In the letter that we have provided, we address several broad considerations. First, there is concern with respect to some of the terms that are included within the bill. There are concerns with respect to vagueness and over-breadth; some of the words associated with corporate culture do not have precise legal meaning. There is concern with reverse onus provisions. Finally, there is concern with respect to a chill that this type of a bill may have upon directors. What I proposed to do in my remarks is provide some legal and constitutional considerations that may serve as a framework within which these issues may be considered.

Really, the issue is how to attribute a state of mind to a corporation. Criminal guilt, of course, requires a guilty state of mind. It requires a mens rea. Traditionally, mens rea has concerned itself with moral blameworthiness. Again traditionally in criminal law, the guilty state of mind can refer to either an act—murder, for example—the consequences of an act—for example, the charge of assault causing bodily harm—or negligence—and to again refer to a traditional charge, dangerous driving is a negligence-based offence. A crime traditionally is thought of as being an act based upon a vicious will. The problem is how to attribute that type of a will to a corporation.

A second consideration is simply one of policy, and that is a consideration of the purpose and the role of criminal law. It's clear that criminal law is fundamental in reflecting and promoting the values of society. It reflects and promotes those values through providing rules with which to guide conduct, but also to punish rule violators. It is the sentencing process that can be used to promote those roles.

A third consideration is simply the consideration of the role of the corporation within society. It's an important role and it's a growing role. Because of that role, a corporation can either promote or detract from broader societal objectives. Just as we recognize the role of a good corporate citizen, we can also recognize the converse. A corporation, of course, must necessarily act through people. Corporate acts reflect human decisions. This is true of corporate actions that result in profit and benefit to a corporation, but it's also true of corporate action that results in the breaching of rules of law. These breaches are the result of human decisions.

The legal framework within which all of this needs to be considered is threefold. There are rules of civil liability, there are regulatory rules, and there's criminal law. All of these can be used to shape behaviour or encourage certain behaviour. All theoretically operate in this way: to shape behaviour or to punish misconduct. The use of criminal law, of course, is the heaviest axe, if you will, but there are different policy and constitutional considerations with respect to each of these. With criminal law, a conviction carries with it the greatest stigma, and it carries with it the most severe penalties. The penalties proposed in Bill C-284 include up to life imprisonment for directors. Because of that stigma, because of that potential for severe penalties, criminal law requires the most rigorous application of constitutional standards.

Á (1105)

Against that framework, I would suggest that the following questions arise: Are amendments to the criminal code with respect to corporate criminal liability needed? What social or policy objectives do you want to promote through any amendments? How is the existing law failing with respect to these considerations of social policy? What is the mischief that you're attempting to address, and what is the scope of that mischief?

I would suggest that you need to consider why it is desirable or necessary to resort to criminal law as opposed to regulatory or civil law. A possible answer to that last question is that, through a resort to criminal law, you can then have resort to criminal sentences, which include specific deterrents, general deterrents, the promotion of social responsibility, reparation, denunciation—which is critical—and rehabilitation.

Against that—and here are my remarks with respect to the possible chilling effect—it is of course the case that corporations must be competitive. Competitive corporations are essential to the vitality of the Canadian economy. Corporations must operate competitively within the domestic and international markets, and that requires dedicated and talented directors and employees. There's a concern that by casting too broad a net of liability, this could have a chilling effect. It could deter the participation of the people you would otherwise want to have acting in the capacity of director or officer, and that could result in less competitive corporations. This is an issue to consider, and it is a concern expressed particularly by the representatives of the CBA's business section.

Finally and briefly, there are options, and I know they were previously discussed this morning. You can maintain the existing model of corporate liability, but it can be clarified through statute; the directing mind model can be maintained, but clarified through statute. You can change the existing model of liability to that of corporate culture, which is what is proposed in Bill C-284. You can create specific offences with a defined basis for liability without rewriting all of corporate criminal liability. For example, you can address considerations of workplace safety. Or you can amend criminal code sentencing provisions to be particular to corporations. For example, there can be enhanced fines; minimum fines; specific provisions with respect to the jailing of directors; probation that would permit the monitoring of corporate behaviour; or specific compliance provisions. These are options for consideration. These are not CBA recommendations.

In arriving at your conclusions, I do urge that you consider that complicated law can sometimes make for complicated and ineffective prosecutions. Sometimes, complicated law—law that is fraught with terms that are vague or terms that are overly broad—will result in a prosecution that goes sideways. That is certainly not in the public interest, nor would terms that are vague or overly broad comply with constitutional standards. In Bill C-284, I would ask you to consider phrases like “tolerate or condone practices” and “allow the development of common attitude”. These are phrases of uncertain meaning, and I would suggest that these terms should be very carefully scrutinized. Similarly, with the reverse onus provisions, when there is criminal liability and a possibility for fines or imprisonment, a reverse onus provision might not comply with constitutional standards.

I should add that the adjudication of issues with respect to mens rea is not new to our courts. These issues cause courts to become involved in the balance of competing interests, competing factors of social or public interest, and deterrence and protection, against individual rights. A policy consideration is simply when, in Canadian society, we want to stigmatize an individual or a corporation with criminal liability. It might be that the “ought to have known” standard is insufficient in that regard. If I might make one more remark, it is perhaps unfair and disproportional to stigmatize with criminal conviction and imprisonment on an “ought to have known” basis.

Thank you.

Á (1110)

The Chair: Dr. McCormick, for ten minutes.

Dr. Christopher McCormick (Professor, As Individual): Thank you.

I'm an associate professor, and I teach criminology at St. Thomas University, in New Brunswick. That’s a fairly rare thing in Canada, because there aren't too many criminology departments. One of the things I teach is corporate crime, and the main message that I try to get across is that corporate crime is probably the most widespread crime in our society. It's certainly the most costly, but the least known. In terms of monetary loss, in terms of harm to individuals, and in terms of harm to the social fabric, it's far more serious than street crime, yet it doesn't figure at all in our consciousness about crime in society.

The last time I was here in Ottawa was two years ago, to attend a book launch at the National Press Club. The book launch was for The Westray Chronicles, a book on Westray that I edited. That morning, I sat at breakfast at a hotel with Lawrence McBrearty, of the United Steelworkers of America. With a very solemn face, he told me a story about an event years ago. A friend of his had been killed in an industrial accident. There was evidence to show criminal liability, but also a reluctance to proceed with any prosecution; thus, none was ever pursued. It has taken me a while to think about that story and to realize how significant it was in his career. I think Westray has been very significant in my career as well in terms of coming to understand how the actions that corporations take, and sometimes the actions that they also fail to take, can result in harm, especially to workers in marginal economies like the Maritimes.

Corporate crime is very different from most of the crime we're used to. It is a crime of power. Most of the crime we hear about, that we're used to, is a crime of opportunity. It's perhaps a crime of malice, but quite often one of opportunity. A person seizes a situation to appropriate some goods for himself for example. That's hardly a crime of power. In fact, most crimes of that sort are committed by relatively powerless people in our society.

The difficulty with a topic like this, then, is that we're dealing with very powerful people in very powerful corporations who can commit the acts that they do because of their power. Because of their power, they can get away with those acts. I think that's a really important thing to think about in terms of the difficulty of addressing this issue: we are dealing with crimes of power, in which there often might be an absence of malice, but in which there is nonetheless a negligence involved that can result in harm or fatalities to workers.

There are five different types of corporate crime. The one we're mainly concerned with here today is crimes against employees and workers. It's certainly very obvious that far more people are injured in the workplace than are injured on the street. Far more people are killed at work than are killed at the hands of other individuals. Those are facts. Many of those are perhaps accidents, but some of them are in fact what we would call crimes if they were committed by an individual.

If I were to create a situation in which you came to visit me one afternoon and suffered a harm at my residence, I could be culpable for what I had done or failed to do. This is exactly what happened at Westray. It had been predicted that there would be a disaster of some sort. Perhaps no one imagined how large it would really be, but it had been predicted that there would be a disaster. It could have been prevented, but it wasn't. Workers went to their jobs while knowing it might be their last shift. Workers told their families that if anything happened, they should get the story out. I think the Westray incident is a very important part of our culture now.

Á (1115)

When current administrative law cannot, through coercion, achieve compliance on the part of corporations to make sure that work standards are adhered to and that people are protected at their place of work, perhaps it is time for the criminal justice system to step in. It’s not, perhaps, that the threat of punishment ever deters some people from committing crimes. Many people will persist in drinking and driving despite the fact that there are serious penalties attached to it. But that threat might deter some people from creating the conditions in which people are injured or killed. I think it also creates a situation in which punishment can be levied after the fact.

We saw the difficulty in pursuing criminal charges in Westray throughout the 1990s, so perhaps there needs to be a better legal remedy involved in terms of addressing these types of situations. When all else fails, society reserves the right to punish people as an expression of the disapproval that they feel about the acts of others. I'd suggest that this is not a different case. We're dealing with acts that are very widespread. We're dealing with acts that are very costly to workers and to society. We're dealing with acts that are very difficult to see, let alone enforce. We're dealing with acts that don't fit in with our ordinary conceptions of what crime looks like. When we go to the store, we don't expect to be poisoned by something we've bought. When we go to work, we don't expect to be killed at work. In various ways, we trust that our society is a safe one, yet the very difficulty of the topic and the very difficulty of doing something about the topic shouldn't stand in our way of trying.

Thank you very much.

Á (1120)

The Chair: Mr. Cadman, for seven minutes.

Mr. Chuck Cadman: I'm going to ask you the same question I asked the previous panel: How far up the chain does the criminal liability extend? That's one thing I'm seized with, and I'm trying to make a determination. Again, the example I used last time was that of a company with a board of directors in Vancouver and a plant in Toronto. If something happens at the plant in Toronto, where does the liability rest with the directors in Vancouver?

Mr. Greg DelBigio: Are you asking the question with respect to where it is under the existing model of law, or under the—

Mr. Chuck Cadman: No, where it should be. We're being asked to sort this all out, so at what point do you feel the liability should rest? How far up the chain should it go? What should be the criteria for assessing it?

Mr. Greg DelBigio: Well, the answer to that really depends upon the model of liability in that—

Mr. Chuck Cadman: Well, criminal liability.

Mr. Greg DelBigio: —and who is caught depends upon…if it is the corporate culture model, for example, the liability could attach to directors anywhere, really, depending on who or what group of directors might be responsible for the particular aspect of a culture that resulted in the wrongdoing. How high up it goes or the geographical location depends upon who is responsible for what has occurred. When I use the word “responsible”, I use that to loosely refer to either being the directing mind—the current model—or responsible for the corporate culture, as proposed in Bill C-284. I don't know how to answer that any better than I now have.

The normative question of who ought to be responsible is central to this question. It's central to considerations of criminal law. It invokes policy considerations, but there's no doubt that traditional considerations of criminal law require these notions of mens rea that I was referring to earlier—no criminal guilt without a guilty mind.

The Chair: Dr. McCormick, did you want to—

Dr. Christopher McCormick: It's difficult to answer questions like this in the abstract, but perhaps the tool we can use is a particular case.

In the public mine inquiry conducted by Justice Peter Richard, a lot of testimony was offered in terms of who knew what was going on in the mine; who issued orders in terms of underground activities at the mine; who was in a position to do something but didn't; and who told people what to do when it was in contravention of the safety regulations. As with any criminal case, I think we can see who knew yet didn't take action. Maybe that's the test right there. Instead of establishing in the abstract how high it should go, let's look at knowledge and responsibility.

Mr. Chuck Cadman: Thanks.

The Chair: John McKay.

Mr. John McKay: I have several questions, the first of which is with respect to director chill, for want of a better term. I asked the question previously, and you possibly were in the room when Professor Puri responded on the law of unintended consequences, if you will, on the idea that we may in fact end up with less capable directors, by one means or another. Her response, not to put too fine a point on it, was that good directors won't be deterred and that the other directors we didn't want in the first place. Her answer was more elaborate than that and I'm being somewhat unfair in characterizing it like that, but I'd be interested in having you expand on that.

The second question has to do with Mr. DelBigio's policy objective. I was just going back through my notes on other testimony. The sponsor of what was Bill C-284 and is now a study on the subject matter of Bill C-284, addresses quite eloquently what the policy objective is here. Really, it's corporate cultural failure, because a person allows a culture to be put in place. Her point was that Westray was not an accident. It was a predictable path to a disaster.

Dr. Susan Dodd said yesterday that people who suffer loss due to industrial negligence are further penalized by no access to justice. There is a sense that the laws of health and safety, the laws of negligence, have failed, and there is no access to what is ultimately this book of values, that people are denied access to fundamental justice and, therefore, are further aggrieved.

So that's my second question, and I'd be interested in your reflections on it.

The third has to do with this Australian model that keeps being put forward to us as an attractive option. Obviously, it departs from what we all understood in law school to be mens rea, an act of mind. It works it out, but there are probably unintended consequences to adopting that kind of corporate cultural model, and they're consequences that I can't fathom at this point. I wonder whether, in your committee's thinking, you've addressed that issue. What would be the other issues that might well arise out of treating, if you will, a form of criminal liability that heretofore hasn't existed in the Canadian criminal culture?

Á (1125)

Mr. Greg DelBigio: With respect to the question of director chill and whether or not good directors will stay, the CBA puts this forward as a consideration: it's a difficult issue. In fact, it is a question for which there might be empirical data, but there's no doubt that, in the face of increased risk, at least some people will be deterred. The extent of the weight of that which would be attached to that particular consideration is for you to decide. We, however, are of the view that there is little doubt that, in the face of increased risk, it will have a deterrent effect. It's not the case that good people will stay regardless of the risk. If there is an unfair risk, even good people will leave.

With respect to the policy considerations and whether or not there are some predictable disasters where there is no access to justice, I go back some of the remarks I made earlier about the mischief that is being addressed here. If there's a specific mischief—for example, workplace safety—it might be easier to think about writing a specific offence rather than rewriting the law of corporate criminal liability. Writing a specific offence probably invites less legal and constitutional peril, if I can phrase it that way. I don't know if any crown prosecutors or police groups are going to be attending as witnesses, but if there is a perception that there is indeed no access to justice, it might be interesting to have their perspective in regard to why the existing criminal law is not being applied where some people think it ought to be.

With respect to the Australian model and whether or not there are unintended consequences and other issues that might arise, one of the concerns we have is that a significant rewriting of law based on such short notice does not give sufficient opportunity to consider those types of important questions. We have not had time to consider the possible far-reaching consequences of Bill C-284. We are of the view that more time should be taken before this fundamental aspect of criminal law is significantly rewritten.

Á (1130)

The Chair: Dr. McCormick.

Dr. Christopher McCormick: That question is probably more of a legal question than what I'm usually used to. One thing I'd like to say with regard to it, though, is that you're dealing with a very complex situation in which workers were encouraged to take risks in an unsafe environment. The production bonus was tied to increased output, which meant cutting corners. That has been well documented by Gerald Wilde, of Queen's University. Instead of having a bonus attached to improved safety, the bonus was instead tied to increased productivity at the expense of safety. This was in a climate in which the managers were either telling workers to ignore safety or were threatening them with the loss of their jobs if they tried to raise issues of safety, all within an environment in which the government inspectors were not doing the job they were legally allowed and required to do.

So we're dealing with a very complex situation, within which a lot of different players were interacting. In my mind, in some ways it's difficult to separate this from other types of actions that individuals undertake. We can pass a law regarding drunk driving, as I mentioned before, and increase the penalties through the ceiling. The reality is, however, that most drivers who drive drunk get home undetected. If the police aren't out there enforcing the laws, you can have all the laws you want in the book but there's no consequence.

Perhaps that's the idea. We need to try to get at the underlying issues of how this could happen in the first place. So while I'm in support of such legislation, perhaps there's also a need to see how gaps that were in place in the existing standards allowed this to happen.

The Chair: Mr. Macklin.

Mr. Paul Harold Macklin: Needless to say, we have quite a challenge before us. Trying to work our way through this is no mean task because we have the Westray situation, in which a great deal clearly had to do with power and politics. It wasn't necessarily the law, but rather the enforcement of the law.

As we sit back and reflect—for example, when we talk about what we could do and what we ought to do—I don't think any of us wish to rush to pass more laws simply to enlarge the volume that we already have. Rather, the question is ultimately one of how we seek a safer workplace and use the tools we have before us, as you suggest.

It does appear that we seem to be running into difficulty if you look at the Westray situation with respect to the fact that, through politics, power, or whatever, the proper tools that appeared to be in place—that is, those for the regulation of workplace safety—simply were ignored. They weren't enforced.

In terms of what we've just been talking about, I don't know whether suggesting that we put a criminal sanction in place would be the adequate answer on the workplace safety regulatory side. Or are we going to get into an area in which there might be some constitutional challenges in terms of the right to legislate in a particular area?

I'd like to get some sense of what all of you have at least thought about and reflected upon in relation to this issue, if you could. Give me some sense of what we ought to be looking at, as opposed to the options. Do you really have a sense of what we should be driving for here?

Á (1135)

Mr. Greg DelBigio: The CBA has not formulated a final response with respect to that question, whether it is rewriting all of liability of putting forward a specific new offence or rereading sentencing provisions. I put those forward as considerations which should be brought to bear in considering these issues.

With respect to laws regarding safety being ignored, it's always the case that laws are going to be ignored. If you increase the penalty, if you increase the jeopardy, it might have a way of catching the attention of people who might otherwise be willing to ignore law. If a regulatory jeopardy is shifted to criminal jeopardy with increased punishment and the increased stigma, maybe that will catch the attention of people who are otherwise inclined to ignore the law for any reason whatsoever. You're never going to stop people from breaking the law.

The caution I would urge is that you not cast too wide a net in the hope that you're going to stop everybody from breaking the law at all times. In addition to that, it is important to not extrapolate too far from a single instance, Westray. I don't use that, I don't say that to in any way minimize or detract from the tragedy at that workplace. But it is important to not use that as a springboard upon which to rewrite criminal law if it is other unnecessary to rewrite all of criminal law.

The Chair: Dr. McCormick, did you want to respond?

Dr. Christopher McCormick: This is a very difficult question for me to think about. I don't think this is just about Westray. I think this is about many instances of corporate crime that I can think of. It's about crimes in which people in positions of power use that power indirectly to their own advantage, but more directly to the advantage of the corporation, either by selling substandard goods to consumers; by not enforcing safety standards in the workplace; by unfairly competing with competitors; by not abiding by the laws of the state; or by engaging in actions that threaten the environment. There are many cases like this—cases in which we can show that people were either in positions in which they should have known, or quite often did in fact know what they did. But I think the difficulty of pursuing this has been aptly demonstrated in Australia and Britain, as others have mentioned.

I do think it is very important that something should be done, but it's not just about Westray. It's about many different instances of crimes of power against employees, consumers, the state, competitors, and the environment. So, frankly, I don't think that chill is a bad thing. That chill might be a good thing if people in positions who can do something come to realize they could be held directly accountable for their actions or inaction.

The Chair: Mr. Lee, did you have anything? No?

Since no one else is jumping forward, I'm going to take this opportunity myself.

I think there has been some discussion that confuses —and I hesitate to say “confuses”—the concepts of something that “could” happen and something that “shall” happen. In the context of that part of the dialogue that has taken place when people have talked about people being held accountable, it doesn't necessarily mean that, just because they can be held accountable, the system isn't going to distinguish between the possibility and the reality. That's one thing I think we need of establish quickly when we talk about, for instance, how far up the chain this might go. It's only a question of whether or not there has to be some level of responsibility. But that's not to say that if we found a criminal act within a corporation, other standards of evidence and culpability wouldn't apply in terms of whether or not the directors would automatically be somehow held responsible for that criminal act within that corporation.

I think it's important to establish that I'm really going to be looking for a response to what I'm saying, in order to make sure I don't have this wrong, in your minds at least.

The other thing has to do with the fact that while we've talked about public safety, I think we also have to talk about some kind of fundamental justice. I think they run a little bit together. I'm reading Mr. Justice Richard's 73rd recommendation, which people have referred to many times. There is a reference to workplace safety as a fundamental, underlying principle or objective. But there are a lot of references to accountability. That fact points not just to the efficacy of the legislation in the context of accountability, but also to the justice in that.

I guess Justice Richard was referring to—and many witnesses have referred to this—the fact that we have competing forces at the end of the day, those forces being the forces that would hold a middle manager in a corporation responsible for behaviour and the forces from above that are pushing in a different direction. Because the responsibility doesn't go that far, there's nothing to stop that downward pressure from above on that middle manager. Perhaps what we're trying to do here is bring more balance to that power relationship inside an institution so that, on behalf of the middle manager, we're pushing back at the corporate executives because we could hold them accountable for that pressure. So I think there's a safety and efficacy issue here, but also a justice issue. We would want different behaviour, but the structures don't necessarily cause that right now.

As the chair and in terms of the future discussions that we're going to have on this, I'd actually even be interested in the committee's reaction on how broadly this reaches outside of the Westray example. It's not to say this is exclusive to that, because Dr. McCormick has also alluded to substandard commercial product. I think of the same dynamics at play if one remembers—again, this is Maritimes stuff, and in this case New Brunswick stuff—StarKist and the problem of the so-called tainted tuna. Pressure was applied to behave in a certain way that not only was not helpful or healthy for the employees, but also was unhealthy for the public at large. One has to think about the application of the same values to a circumstance like that, in which the consequences of the behaviour would extend far beyond the employees of the company.

Anyway, I know I'm rambling a little bit. I pushed it longer so that you could collect your thoughts, though, and Mr. Cadman has forgiven me for that.

Mr. DelBigio or Dr. McCormick.

Á (1140)

Mr. Greg DelBigio: There is a desire expressed by some to try to press liability higher up the ladder. The question that arises is why that desire exists. To go to the “ought” question, why ought it be the case that liability attaches at the top rather than the bottom or the middle? I don't know that this question can be answered in the abstract. I would suggest that the best way of examining the question is to determine who is responsible for a particular wrongdoing. Maybe it's the top, maybe it's the middle, or maybe it's the bottom. But without more, simply striving to attach liability at the top is perhaps going to invite problems.

Public safety and fundamental justice are always competing considerations. You want as much safety as you can. You want justice for people who have been harmed through wrongdoing that resulted in an unsafe workplace. But the caution is that those desires can't be used as a basis upon which to erode constitutional protections for accused persons or otherwise existing criminal law standards. The policy considerations require a delicate balancing between these competing considerations. I use the phrase “a delicate balancing”, and I think it really is.

Á (1145)

The Chair: Dr. McCormick.

Dr. Christopher McCormick: I'm glad that you've topicalized this as a justice issue, because I think it's a lot more than simply a criminal law issue. It's a matter of how we want to conduct ourselves as a society and of how we expect people to behave as well.

I've been thinking all along that we can do everything we wish to try to deter people from committing crime, but there are some who, either through ignorance or intent, will continue to do so. What we reserve as a society is the right to punish people who harm the society. This is a specific punishment against certain individuals, but it's also a general message to society. Not only are we saying, “Don't go there”, we're also saying “We'll protect you”.

I think what happened in the Westray trials was that the message the public got was, “We cannot protect you”. It's possible, perhaps, that if the prosecutorial service of Nova Scotia had had sufficient resources and time, it could have actually launched a successful prosecution under the existing law at the time—maybe, but that's an open question. It was fairly obvious that there weren't enough staff and that there wasn't enough technological support. There was difficulty in simply cataloguing the millions of pages of documents that the prosecutors had. The police also had difficulty in terms of securing the mine and keeping hold of evidence, and so on. So in a variety of missteps, the public got the message that this could continue to happen again, that it did happen, and that it was predicted that it would happen. It needn't have happened, but it did and no one got punished at the end of the day. I think that's really important. As the justice said, at the end of the day, the mine blew up. Well, everything blew up.

Despite difficulties in terms of ascertaining responsibility, of chain of command, of a guilty mind, and so on, I think there is a very important symbolic character to the law. It sends out the messages that everyone is accountable, that society is more than its individuals, and that the law is there to protect society. So it very much is a justice issue.

The running aground of the Exxon Valdez was predicted approximately fifteen years in advance by the United States Coast Guard. There were certainly obvious problems on the Ocean Ranger oil rig off Newfoundland, as well. Gaps in legislation let companies in Spain put a machine-grade oil into commercial-grade olive oil and sell the product in stores. Gaps in regulatory enforcement allowed American firms to put PCB-contaminated waste into fuel oil and ship it into Canada. We have all kinds of examples of where these crimes happen. As a public, we tend not to know much about them, but when they do come to the surface, there certainly has to be the very clear message that we're taking this seriously, that we consider it to be very important, and that everything possible will be done to try to bring those responsible to justice.

The Chair: Thank you, Dr. McCormick.

Mr. Cadman.

Mr. Chuck Cadman: On another issue, Dr. McCormick, I believe you made a statement that far more people are killed at work than are killed at the hands of others. I'm just wondering about the basis for that statement. More importantly, of those killed in the workplace, do you have any sense of how many deaths could have been avoided if we were to introduce legislation such as what is being recommended?

Dr. Christopher McCormick: That’s a simple question, but a complicated question. I think you're on the margins of current corporate criminology in the sense that it has taken a long time for criminology to even identify crimes of power by corporations. Going back to the 1980s, research in Canada showed that people were something like 28 times as likely to be injured in the workplace than elsewhere, and almost 4 times as likely to be killed in the workplace as elsewhere. That's pretty much the state of the research even today. There is very little that I can think of offhand that could give us a reliable estimate of how many of those were due to corporate negligence, let alone how many could have been prevented. Despite the fact that this is a new area of research in many ways, though, it really highlights the invisibility of corporate crime in our society. We tend to use words like “workplace injuries”, “workplace accident”, and “workplace disasters”. We say Westray was a tragedy. Of course it was a tragedy. But we tend to use these euphemisms, and that in part leads to the disguising of the problem. So in short, no, I can't answer your question.

Á (1150)

Mr. Chuck Cadman: How many were actually killed in the workplace last year? Do you have that number?

Dr. Christopher McCormick: I think the last estimate that I saw put it at 700 to 800, I believe. But we can't assume all of those were intentional or due to negligence.

Mr. Chuck Cadman: I was just wondering, because you made the comment that more were killed in the workplace than were killed at the hands of others. For instance, I was just dealing with some impaired driving statistics yesterday, and the annual average is 1,700 alcohol-related crashes. Again, I'm not trying to minimize, but I just want to make sure we get those numbers straight.

Dr. Christopher McCormick: I think that's a very important question. The way I deal with the idea is by asking what counts as crime when counting crime counts. Is a death a homicide when the assailant is drunk, or is that an accident? Is a death a homicide when safety standards aren't observed, or is it an accident? We can go through these examples, but I think the examples show that there is a politics to how we count death in our society. There is a politics in terms of how we count the risk of death. Some deaths are not called homicide because of where they occur, and I think that's a crime.

The Chair: Mr. DelBigio.

Mr. Greg DelBigio: If I could make a remark about that, it is important to consider accident rates and death rates in the workplace. There's no doubt that risks incurred in the workplace are going to be different from those incurred by walking down the street, simply due to the nature of some tasks performed at the workplace.

With respect to Dr. McCormick and his phrase “the invisibility of corporate crime”, if there is an incidence of accidents or death in the workplace—which is alarming—it doesn't follow necessarily from that statement that there is corporate crime and that it is therefore invisible or invisible to date. It might show that there is reason for concern. It might show that there is cause for scrutiny and examination or increased safety standards. But it does not follow, of necessity again, that there is therefore invisible corporate crime that needs to be address through the rewriting of criminal law.

The Chair: Mr. McKay.

Mr. John McKay: When Professor Boisvert and Professor Puri were here, I asked both of them a question about the three choices that we essentially have: follow the corporate cultural model; create a specific offence; or deal with the sentencing guidelines and enhance sentencing comments in the report, or those sorts of things, so that judges become a little more creative. Professor Boisvert said she was against—I think I'm correctly interpreting her—the creation of a specific crime. On the other hand, Mr. DelBigio, you seem to think creating this specific offence rather than rewriting corporate liability law—i.e., the Australian model—would be a better way to go.

Have you given thought to the tighter contents of what you have in mind when you say “create a specific offence”? Secondly, have you given thought to the issue of the professors' comments about the sentencing guidelines and sentencing issues? Up to now, I don't think you've made any comments on sentencing. I think the example was that of a corporation found guilty of an offence being required to publish its guilt in the Globe and Mail or some other national newspaper, or something of that nature. I'd be interested in your thoughts on that.

Á (1155)

Mr. Greg DelBigio: The CBA is not putting forward and has not yet had an opportunity to consider specifically which of those models we might recommend: corporate culture; specific offence; or sentencing guidelines. I addressed all of those as certainly being issues for consideration. My view is that it is probably easiest to create a specific offence or easiest to create sentencing guidelines rather than introducing something like a corporate-culture basis for criminal liability. And when I say “easiest”, I mean it requires that the existing criminal law be altered in less fundamental ways. It is a more commonplace task to write a new offence, which is done fairly commonly; or to create new sentencing guidelines, which is done on an occasional basis. I think I used the phrase earlier that it's fraught with less peril than rewriting criminal liability.

Mr. John McKay: Do you know whether or not Australia has a charter that would parallel ours?

Mr. Greg DelBigio: I don't believe so.

Mr. John McKay: So it is a classic common-law-model country?

Mr. Greg DelBigio: Yes, and as I understand it, through the useful discussion paper that was prepared by the Department of Justice, the law there is a law that has not yet been tested in the courts.

The Chair: Mr. Macklin.

Mr. Paul Harold Macklin: I'd like to go in a slightly different direction. Looking at where we're going with director responsibility, corporate location, and globalization, I'm wondering whether you've put your mind to the thought that we should try to reflect the trading partner relationship in some way in terms of our corporate criminal responsibility. That is, with our main trading partner being the United States, do you see that there may be some merit, from a legal perspective, in trying to maintain a sense of uniformity as it relates to this area, as opposed to just venue selection for corporate head offices and so forth?

Mr. Greg DelBigio: Just to clarify that, do you mean uniformity, for example, in writing Canadian law in the same terms as American law?

Mr. Paul Harold Macklin: In terms of corporate criminal responsibility, yes.

Mr. Greg DelBigio: That is a complicated issue. The issue of forum shopping in accordance with the most lenient criminal law is something we have certainly not yet had a chance to consider. It’s something we can perhaps do, though, if it is important or necessary that we do so.

Mr. Paul Harold Macklin: Dr. McCormick.

Dr. Christopher McCormick: That's a good question. I have also just started to look at the literature on how the this type of law is developed in other countries—Australia, Britain, the U.S., and Germany, too, I think—so I'm not yet very well qualified to speak about that.

In a sense, venue shopping does exist already. In certain cases, corporations are trying really hard to make sure they're tried in one country rather than another because they'll face less serious consequences. So you're right that, in an age of globalization, it's a very important reality to deal with.

Mr. Paul Harold Macklin: You don't want to get locked into looking for the lowest common denominator, but I think there is a sense of balance that one would like to achieve as a policy objective.

Mr. Greg DelBigio: If I might make one further remark, it is a complicated issue because there is both federal and state law in the United States, of course. In the international marketplace, you might want to look at any number of countries and at their laws, but I don't think there is any uniformity throughout the various countries.

You also have to look at the different constitutional contexts for each country. It has been quite clear in other criminal law issues that have been considered by the Supreme Court of Canada that we are not to simply adopt American law because it is there. The Canadian context requires different, separate considerations that might well result in law that is different from the American law.

Â (1200)

The Chair: Thank you, Mr. Macklin.

As one last question that I'd like to put to Mr. DelBigio, in the report of the commissioner of the inquiry, Justice Richard clearly took the position that the Parliament of Canada should introduce legislation to address the inadequacy of the Criminal Code as it currently exists in terms of this specific case. We've talked about the three options that are available to us to respond to that inadequacy. I understand that the Canadian Bar Association is reluctant to weigh in on those options, but would the Canadian Bar Association weigh in on whether or not the present legislation is in fact inadequate?

Mr. Greg DelBigio: We have not taken a position with respect to that. If we were asked to do so, I would say we would take that back for consideration.

When we're considering adequacy or inadequacy, it's important that we simply think about clarity. Does existing legislation provide the clarity and certainty that is desirable with legislation, so that people who wish to be rule-abiding can refer to the legislation and determine with certainty how they can be rule-abiding? Right now, I will choose not to answer on whether or not the existing legislation provides that.

The Chair: I want to thank our witnesses and the members of the committee. The complexity of the issue is increasingly apparent, and our witnesses have helped us very much in terms of getting our minds around this in a variety of ways

The meeting is adjourned.