Bill C-4: An Act to implement the Agreement between Canada, The United States of America and the United Mexican States

Tabled in the House of Commons, February 21, 2020

Explanatory Note

Section 4.2 of the Department of Justice Act requires the Minister of Justice to prepare a Charter Statement for every government bill to help inform public and Parliamentary debate on government bills. One of the Minister of Justice’s most important responsibilities is to examine legislation for inconsistency with the Canadian Charter of Rights and Freedoms [“the Charter”]. By tabling a Charter Statement, the Minister is sharing some of the key considerations that informed the review of a bill for inconsistency with the Charter. A Statement identifies Charter rights and freedoms that may potentially be engaged by a bill and provides a brief explanation of the nature of any engagement, in light of the measures being proposed.

A Charter Statement also identifies potential justifications for any limits a bill may impose on Charter rights and freedoms. Section 1 of the Charter provides that rights and freedoms may be subject to reasonable limits if those limits are prescribed by law and demonstrably justified in a free and democratic society. This means that Parliament may enact laws that limit Charter rights and freedoms. The Charter will be violated only where a limit is not demonstrably justifiable in a free and democratic society.

A Charter Statement is intended to provide legal information to the public and Parliament on a bill’s potential effects on rights and freedoms that are neither trivial nor too speculative. It is not intended to be a comprehensive overview of all conceivable Charter considerations. Additional considerations relevant to the constitutionality of a bill may also arise in the course of Parliamentary study and amendment of a bill. A Statement is not a legal opinion on the constitutionality of a bill.

Charter Considerations

The Minister of Justice has examined Bill C-4, An Act to implement the Agreement between Canada, The United States of America and the United Mexican States, for any inconsistency with the Charter pursuant to his obligation under section 4.1 of the Department of Justice Act. This review involved consideration of the objectives and features of the Bill.

What follows is a non-exhaustive discussion of the ways in which Bill C-4 potentially engages the rights and freedoms guaranteed by the Charter. It is presented to assist in informing the public and Parliamentary debate on the Bill.

Overview

The Canada-United State-Mexico Agreement Implementation Act implements those aspects of the trade agreement signed by Canada the United States and Mexico on November 30, 2018, as modified by the Protocol of Amendment to the Canada-United States-Mexico Agreement signed on December 10, 2019, which require changes to Canadian law. Together the Agreement and Protocol of Amendment will replace the North American Free Trade Agreement between Canada the United States and Mexico that has been in force since January 1, 1994.

The main Charter-protected rights and freedoms potentially engaged by the proposed measures include:

• Freedom of expression (section 2(b)) – Section 2(b) provides that everyone has freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication.
• Right to life, liberty and security of the person (section 7) – Section 7 of the Charter guarantees to everyone the right to life, liberty and security of the person, and the right not to be deprived thereof except in accordance with the principles of fundamental justice. These principles require that laws which engage these rights must not be arbitrary, overbroad, or grossly disproportionate. An arbitrary law is one that impacts section 7 rights in a way that is not rationally connected to the law’s purpose. An overbroad law is one that impacts section 7 rights in a way that, while generally rational, goes too far by capturing some conduct that bears no relation to the law’s purpose. A grossly disproportionate law is one whose effects on section 7 rights are so severe as to be “completely out of sync” with the law’s purpose.
• Right to be secure against unreasonable search or seizure (section 8) – Section 8 of the Charter protects against “unreasonable” searches and seizures. The purpose of section 8 is to protect individuals against unreasonable intrusions upon their privacy. A search or seizure that intrudes upon a reasonable expectation of privacy will be reasonable if it is authorized by a law, the law itself is reasonable (in the sense of striking an appropriate balance between privacy interests and the state interest being pursued), and it is carried out in a reasonable manner.
• Equality Rights (section 15) – Section 15 protects equality rights. It provides that every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age, mental or physical disability, or other grounds analogous to those listed in section 15.

Canada Deposit Insurance Corporation Act, Bank Act, Trust and Loan Companies Act, and Insurance Companies Act

The Canada Deposit Insurance Act, the Bank Act, the Trust and Loan Companies Act, and the Insurance Companies Act require all federally regulated financial institutions to maintain prescribed records, including personal records, for supervisory and regulatory purposes. Copies of such records are currently required to be stored in Canada.

A number of clauses in Part 2 of Bill C-4 would create a framework to exempt certain foreign owned banks, trust and loan companies, and insurance companies from the requirement to maintain copies of the prescribed records in Canada, subject to financial regulatory authorities having immediate, direct, complete and ongoing access to those records. If the financial regulatory authorities were of the opinion that they do not have immediate, direct, complete and ongoing access to those records, they could order that a copy of the records be maintained in Canada. Also, the Superintendent of Financial Institutions would be required to order that a copy of the records be maintained in Canada when the Minister of Finance is of the opinion that it would not be in the national interest not to have copies of the records in Canada.

These clauses potentially engage privacy interests protected under section 8 of the Charter. The following considerations support the consistency of these clauses with section 8 of the Charter. The clauses do not grant any new authority for regulators to collect new information and Canada’s privacy framework established under the Personal Information Protection and Electronic Documents Act will continue to apply to all financial institutions that do business in Canada, whether the data is stored in Canada or abroad. The proposed provisions would create a power to order that copies of records be maintained in Canada so that financial regulatory authorities may continue to carry out their existing supervisory responsibilities in a highly regulatory context in which privacy expectations may be somewhat lower than in a criminal context. The existing inspection and requirement powers would continue to be available for the regulatory purpose of verifying compliance and preventing non-compliance with various Acts. They would not be available for the purpose of advancing penal investigations. As such, the proposed powers are similar to inspection powers that have been upheld in the regulatory context. To the extent that the provisions confer discretion on regulators and/or ministers to take specified actions, that discretion would have to be exercised with due regard for Charter rights.

The provisions strike an appropriate balance between privacy interests and the requirement for regulators to be able to verify compliance.

Copyright Act

Clause 30 would amend section 42 of the Copyright Act to create a new offence to protect the rights of copyright owners. The offence would prohibit the removal or alteration of “rights management information in electronic form” done in order to facilitate or conceal infringements of the rights of copyright owners. It would also prohibit various activities concerning copyrighted works whose rights management information has been removed or altered without consent so as to conceal infringement, including the public exhibition or communication to the public, of that work.

Section 7 of the Charter guarantees to everyone the right to life, liberty and security of the person, and the right not to be deprived thereof except in accordance with the principles of fundamental justice. Because the proposed offence gives rise to the possibility of imprisonment, it potentially engages the section 7 right to liberty and so must respect the principles of fundamental justice. In reviewing the relevant provisions, the Minister has not identified any potential inconsistencies with the principles of fundamental justice.

Copyright provides exclusive economic and moral rights in forms of expression, such as literary and artistic works, and as such may potentially engage freedom of expression protected in section 2(b) of the Charter. Clause 30 would introduce paragraph 42(3.2)(b) of the Copyright Act which has the potential to engage freedom of expression to the extent that it prohibits the public exhibition or communication to the public of copies of copyrighted works whose rights management information has been removed or altered to conceal infringement. A number of other clauses in the Bill would extend the term of protection. The following considerations support the consistency of these clauses with section 2(b) of the Charter. These clauses help to ensure that copyright owners benefit from their work, and help to encourage the creation and dissemination of works. The proposed prohibition criminalizes only conduct for commercial purposes, while expressly exempting persons acting on behalf of a library, archive, museum or educational institution. Copyright protection continues to be subject to limitations and exceptions, such as fair dealing, and will be understood within the balance of rights set out in the Copyright Act. Overall these clauses promote and protect expressive values.

Clause 32 would amend paragraph 44.04(1)(b) of the Copyright Act to expand the listed information that may be provided by customs officers to the owner of the copyright regarding suspected pirated copies of works. In addition to the name, address and importer or exporter information, the customs officer could provide information about any other persons involved in the movement of the works.

This clause potentially engages privacy interests protected under section 8 of the Charter. The following considerations support the consistency of paragraph 44.04(1)(b) with section 8 of the Charter. The provisions would add to the existing listed information that may be provided by the customs officer to the owner of the copyright. The expansion of listed information to include information about any other persons involved in the movement of the works is not a significant expansion of the existing list. In addition, the collection of information occurs at the border where there is a lower expectation of privacy.

Criminal Code

Clause 37 of the Bill would enact section 391 of the Criminal Code to make it an offence to (1) by deceit falsehood or other fraudulent means, knowingly obtain or communicate or make available a trade secret, and (2) to knowingly obtain or communicate or make available a trade secret, knowing that it was obtained by the commission of an offence under (1).

Because the proposed offences give rise to the possibility of imprisonment, it potentially engages the section 7 right to liberty and so must respect the principles of fundamental justice. In reviewing the relevant provisions, the Minister has not identified any potential inconsistencies with the principles of fundamental justice.

The proposed offences have the potential to engage freedom of expression protected in section 2(b) of the Charter because in the specified circumstances they prohibit the communication of a trade secret knowing that it was obtained by crime.

The following considerations support the consistency of section 391 with section 2(b) of the Charter. The purpose of the amendment is to preserve economic value of trade secrets from those whose criminal intentions or actions would be to obtain, knowingly communicate, or make available the trade secret. Further, the proposed amendment criminalizes only knowing conduct, and not inadvertent or unintentional actions. Finally, the proposed amendment would not criminalize a person who obtained the trade secret by independent development or by reason only of reverse engineering.

Canada Grain Act

Clause 67 of the Bill would enact section 83.1 to 83.3 of the Canada Grain Act. Section 83.1 would require every licensee and person who sells grain to a licensee, to make and provide a declaration respecting the grain to a prescribed person. Section 83.3 would prohibit the making of a false or misleading statement in a declaration prescribed by regulation, punishable as an offence.

Because the proposed offence gives rise to the possibility of imprisonment, it potentially engages the section 7 right to liberty and so must respect the principles of fundamental justice. In reviewing the relevant provisions, the Minister has not identified any potential inconsistencies with the principles of fundamental justice.

The proposed provisions have the potential to engage section 2(b) because they require a licensee, and persons who sell grain to a licensee, to make a declaration. The following considerations support the consistency of section 83.1 with section 2(b) the Charter. The purpose of the requirement to make a declaration is to ensure that the grain meets certain requirements and to enhance transparency and accountability. The declaration would help ensure the proper implementation and enforcement of the Grain Act, and would encourage careful record keeping and compliance.

Trademarks Act

Clause 110 would amend paragraph 51.06(1)(b) of the Trademarks Act to expand the listed information that may be provided by customs officers to the owner of the trademark regarding information about the goods. In addition to the name, address and importer or exporter information, the customs officer could provide information about any other persons involved in the movement of the goods.

This clause has the potential to engage privacy interests protected under section 8 of the Charter. The following considerations support the consistency of paragraph 51.06(1)(b) with section 8 of the Charter. The provisions would add to the existing listed information that may be provided by the customs officer to the owner of the trademark. The expansion of listed information to include information about any other persons involved in the movement of the goods is not a significant expansion of the existing list. In addition, the collection of information occurs at the border where there is a lower expectation of privacy.

Customs Act

Clause 118 of the Bill would amend section 42.1(1) of the Customs Act to provide authority for a designated officer or person to enter a prescribed premise to verify the amount of “duty relief” or “duty drawback” under the Customs Tariff, in respect of imported goods that are subsequently exported to a CUSMA country. Clause 120 of the Bill would amend section 42.6 of the Customs Act by allowing an officer to enter the premises of an exporter or producer of goods to conduct duty evasion verification, if requested by a CUSMA country. Duty evasion is defined in section 42.5 as the evasion of anti-dumping, countervailing or safeguard duties that are imposed by a CUSMA country other than Canada. Section 42.7 would permit the officer to provide a requesting CUSMA country with a report that contains relevant information obtained from an exporter or producer of goods in Canada during the verification.

These clauses have the potential to engage privacy interests protected under section 8 of the Charter. The following considerations support the consistency of the provisions with section 8 of the Charter. The proposed provisions would add to existing powers in the Customs Act to enter premises, in order to allow designated officers or persons to enter to verify duty relief and duty drawback, and designated officers to enter to conduct duty evasion verification. The importation and exportation of goods is a highly regulatory context. The purpose of verifying compliance is regulatory in nature, and intended to ensure that persons claiming benefits under the Agreement are in compliance with the legal requirements. The proposed powers strike an appropriate balance between privacy interests and the requirement for officers or persons to be able to verify compliance.

Section 15 of the Charter

The Bill, in various clauses in Parts 1 and 2, would create, re-enact, or authorize distinctions between, citizens or nationals of countries that are parties to the Agreement, and all other persons. The Bill would also, in various clauses, create, re-enact, or authorize distinctions among citizens or nationals of countries that are parties to the Agreement. These distinctions have the potential to engage section 15 of the Charter. Section 15 guarantees that every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination based on listed and analogous grounds.

The following considerations support the consistency of the provisions with section 15 of the Charter. For the purpose of international trade agreements, citizenship or nationality is used as a mutually-recognized, objective criterion to identify persons who receive the reciprocal benefits and burdens that flow from their countries’ participation in the agreements. Extension of benefits and burdens to citizens or nationals on a reciprocal basis manifests no arbitrary distinction but rather is fundamental to the nature of international trade agreements.